Employer Shared Responsibility

Under health care reform, employers have responsibilities to provide their employees with health insurance coverage.

These responsibilities are addressed in the Employer Shared Responsibility (ESR) provisions of the Affordable Care Act. 

Health Care Reform SiteEffective January 1, 2015, applicable large employers with 100 or more full-time equivalent (FTE) employees (and have at least one full-time employee obtaining a subsidy for coverage) could be assessed a penalty if:

  • They don't offer employees and their dependents health coverage that meets established minimum essential coverage requirements, or
  • Employer coverage is determined to be unaffordable or does not provide minimum value.

Penalties may apply if an applicable large employer does not offer coverage to at least 70 percent (or all but five) of their full-time employees in 2015, and 95 percent in 2016. If one or more full-time employee gets subsidized coverage, the potential penalties could add up*:

  • Business with 50 full-time employees: $40,000 per year
  • Business with 100 full-time employees: $140,000 per year
  • Business with 200 full-time employees: $340,000 per year
  • Business with 500 full-time employees: $940,000 per year

*Penalty calculations are general estimates calculated using the guidance in the ESR provisions. Please see out ESR calculator page for more information.

Employers should track employee hours now to determine how many FTEs and full-time employees they have in preparation for open enrollments and offering health coverage in 2015.

For more information about Health Care Reform and Employer Shared Responsibility, please visit Paychex’ Health Care Reform site.  

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PaychexPayChex logo is committed to providing businesses the freedom to succeed. We do this by offering products and services that help clients do what they do best – run their business. From calculating payroll and filing tax payments to administering retirement plans and workers' compensation, Paychex gives its clients relief from administrative hassles so they can focus on their bottom line. For resources to help you start, grow, and manage your business, visit www.buildmybiz.com.