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employer’s investment. The 2013 Aflac WorkForces Report, a survey of over 5,200 workers
across the United States, revealed 41 percent of employees say they do not truly understand
their employer’s contribution to their health care coverage. Especially as employees become
increasingly aware of actuarial value standards, employers can leverage their investment by
frequently and effectively communicating the value of the company’s benefits coverage.
Businesses, large and small, rely on health benefits to provide a unique competitive-edge in
the battle to attract and retain talented workers. When it comes to making “play” or “pay”
decisions, many new health care reform requirements, penalties and tax subsidies are
determined by employer size, including:
Large Employers
Employers with 50 or more full-time equivalent employees are required to:
1
| Offer affordable, minimum value coverage or may be subject to penalties
2
| Not exceed certain out-of-pocket limits
Note: Large employers and self-insured plans are not required to provide essential health benefits, but if they do,
those benefits cannot have any annual dollar or lifetime dollar limits. However day/visit limits are allowed. Public Health
Services Act (PHSA) excepted benefits are not subject to health care reform changes, and are available to employers
of all sizes, as well as individuals.
Small employers
Although employers with 50 or fewer full-time equivalent employees (FTEs) will not be penalized
for not providing a health plan, still many small businesses may offer benefits as an important
part of an employee’s total compensation package. Employers with 50 or fewer employees will
be eligible to purchase coverage through the Small Business Health Options Program (SHOP)
Marketplace. Additionally, employers with 25 or fewer full-time equivalent employees* may be
eligible for tax credits. Small employers offering employer-sponsored major medical insurance
benefits are required to:
1
| Offer Essential Health Benefits
2
| Meet Actuarial Value Standards (Metal Levels)
3
| Not exceed certain specified deductible and out-of-pocket limits.
*Note: As of 8/26/13,
states that businesses with
fewer than
25 employees are eligible for these credits,
however Internal Revenue Code Section 45R states that the term “eligible small employer” means an employer which
has
no more than
25 full-time equivalent employees for the taxable year. For more information about these credits,
visit:
Health care reform expands access to health care coverage, and reform guarantees access
and renewal of health care to all individuals regardless of their health condition. This means
that both high and low risk (and high and low cost) employees will have the opportunity
to purchase coverage on the individual market.
2
Employer Size
