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What are the penalties if large employers don't provide coverage?


Large employers may have to pay a tax penalty if they don't offer affordable coverage that provides minimum value for at least 95% of their full-time employees and their dependents, or all but 5 full-time employees, whichever is greater, and at least one of their employees gets premium tax credits through the Health Insurance Marketplace. The penalty will be imposed starting January 1, 2016 for plan year 2015. For detailed information, employers should seek professional advice.

The penalty for a large employer that doesn't offer coverage to full-time employees and their dependents is $2,000 multiplied by the number of applicable full-time employees, if at least one full-time employee has received a tax credit from the Health Insurance Marketplace. The first 30 employees are exempted in the count.

Similarly, the penalty for a large employer that offers coverage that isn't affordable or doesn't give minimum value is $3,000 multiplied by the number of full-time employees who are receiving tax credits. (The maximum penalty may not be greater than $2,000 multiplied by the total number of all full-time employees.)

Medicaid eligible employees can't get tax credits, so employers will not face penalties for employees who receive Medicaid coverage or for children who receive CHIP coverage.

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