Employer and Individual Mandates in Health Reform

The employer responsibility provisions have been altered so that employers who do not offer coverage and have 50 or more employees would have to pay $2,000 per FTE (up from $750), if even one full-time employee get subsidies in the exchange. However, the first 30 employees would be subtracted from the total. These provisions were in the President’s February 24th proposal.

The health reform bill bill encompasses part-time workers when determining whether an employer would be considered a “large employer” (50 or more workers) subject to the tax. Employers who do offer coverage and have a FTE in the exchange must may a penalty of $3,000 per employee.

For the purpose of calculation on whether an employer is a “large employer,” the legislation requires employers to divide the aggregate hours worked by all part-time employees in a month by 120, and that number would be a full-time equivalent. The provision now raises $52 billion over 10 years, up from $28 billion in the underlying bill.

Summary of Employer and Health Reform Benefits and Requirements

The individual mandate will now be phased in. By 2017, the fee for not purchasing coverage will be the greater of $695 or 2.5 percent of income. The provision will now raise $17 billion over 10 years, up from $15 billion.

Summary of Shared Responsibility of Health Reform