Affordable Care Act Compliance from the Employer's Perspective

April 15, 2016

Cynthia J. Borrelli

Publication
New Jersey Lawyer Magazine

Cynthia J. Borrelli



Employers employing at least 50 employees are subject to the employer shared responsibility provisions. A full-time employee is an individual employed at least 30 hours per week, on average. An employer that meets the 50 full-time employees threshold is referred to as an 'applicable large employer' (ALE). The 50 full-time employees can be calculated based on a combination of full-time and part-time employees. For example, an employer that employs 40 full-time employees (30 hours or more per week) and 20 employees working 15 hours per week on average has the equivalent of 50 full-time employees, and would be characterized as a large employer. 

Pursuant to the employer shared responsibility provisions, if these employers do not offer health coverage that provides a minimum level of coverage to their full-time employees and dependents, the employer may be subject to an employer shared responsibility or 'pay-or-play' penalty if one of its full-time employees receives a premium tax credit for purchasing individual coverage from one of the new affordable insurance exchanges, also called the health insurance marketplaces.

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This article was originally published in the April 2016 issue of the New Jersey Lawyer, a publication of the New Jersey State Bar Association, and is reprinted here with permission.