Are There Penalties for Businesses with 50 or More Employees That Do Not Provide Insurance for Their Employees? – YES
General Reference (not clearly pro or con)
The Patient Protection and Affordable Care Act, Section 1513, “Sec. 4980.H Shared Responsibility for Employers Regarding Health Coverage,” page 135, signed into law on Mar. 23, 2010, available at the Library of Congress website:
“(a) LARGE EMPLOYERS NOT OFFERING HEALTH COVERAGE.—
If—
(1) any applicable large employer fails to offer to its fulltime employees (and their dependents) the opportunity to enroll in minimum essential coverage under an eligible employer sponsored plan (as defined in section 5000A(f)(2)) for any month, and
(2) at least one full-time employee of the applicable large employer has been certified to the employer under section 1411 of the Patient Protection and Affordable Care Act as having enrolled for such month in a qualified health plan with respect to which an applicable premium tax credit or cost-sharing reduction is allowed or paid with respect to the employee, then there is hereby imposed on the employer an assessable payment equal to the product of the applicable payment amount and the number of individuals employed by the employer as full-time employees during such month.”
Mar. 23, 2010 - Patient Protection and Affordable Care Act (HR 3590)
Valerie Jarrett, JD, Senior Advisor and Assistant to the President for Intergovernmental Affairs and Public Engagement, stated the following in her July 2, 2013 posting on the White House Blog, “We’re Listening to Businesses about the Health Care Law,” available at the White House website:
“As we implement this law, we have and will continue to make changes as needed. In our ongoing discussions with businesses we have heard that you need the time to get this right. We are listening. So in response to your concerns, we are making two changes…
[W]e are giving businesses more time to comply. As we make these changes, we believe we need to give employers more time to comply with the new rules. Since employer responsibility payments can only be assessed based on this new reporting, payments won’t be collected for 2014. This allows employers the time to test the new reporting systems and make any necessary adaptations to their health benefits while staying the course toward making health coverage more affordable and accessible for their workers.” [Editor’s Note: The Obamacare mandate requiring employers with 50 or more employees to provide coverage for their workers or pay penalties will not begin to be enforced until 2015.]
PRO (yes)
Pro
Elizabeth MacDonald, Stocks Editor for Fox News, wrote in her June 29, 2012 article “SCOTUS Ruling Means Bigger, More Intrusive IRS,” available at the Fox Business website:
“The health-reform law exempts all small businesses with fewer than 50 employees from the law’s ‘shared responsibility requirement,’ which begins in 2014. But beginning in 2014, employers with 50 or more employees that do not offer health insurance coverage will pay a fine of $2,000 per full-time worker if any of their employees turn around and get premium tax credits through the new health insurance exchanges.
Even if the small business has 51 workers, and that one worker gets a tax credit to help them buy insurance — a tax credit provided under health reform — the small business still has to pay a fine.”
Pro
The US Department of Health and Human Services wrote in a January 2012 brochure titled “For Small Businesses: The Facts on the New Health Care Law,” available online at the Affordable Care Act website:
“[S]tarting in 2014, a large employer may have to pay an assessment if it does not offer affordable insurance and one of its employees gets tax credits to purchase insurance in the Exchange. These assessments do not apply to businesses with less than 50 employees.
Large employers that do not offer health benefits coverage at all may be required to pay an assessment of $2,000 per year for each fulltime employee, excluding the first 30 full-time employees. Larger employers that do offer health benefits coverage that is unaffordable or lacks minimum value may be assessed a payment of $3,000 per year for each full-time employee receiving federal financial assistance. However, this payment cannot exceed the assessment the business would pay if it did not offer health care coverage. Note: the U. S. Department of Health and Human Services estimates that fewer than 2% of large American employers will have to pay these assessments.”
Pro
Peter Schiff, Forbes Contributor, wrote in his July 31, 2012 article “Justice Roberts Is Right, Obamacare Won’t Work,” available at the Forbes website:
“[T]he burdens placed on employers with more than 50 workers are complex, onerous and unpredictable. Those that don’t offer insurance would be subject to substantial (and open ended) penalties if at least one employee receives an insurance tax credit or a government subsidy to an insurance exchange.
If they do offer insurance, they will also be subject to substantial (and open ended) penalties if the plan fails to cover 60% of employee health expenses, or if premiums for any employee are more than 9.5% of family income.”
Pro
The US Department of Labor, stated in its Feb. 9, 2012 Technical Release No. 2012-01 “Frequently Asked Questions from Employers Regarding Automatic Enrollment, Employer Shared Responsibility, and Waiting Periods,” available at www.dol.gov:
“The employer shared responsibility provisions, contained in section 4980H of the Internal Revenue Code (Code), provide that an applicable large employer (for this purpose, an employer with 50 or more full-time equivalent employees) could be subject to an assessable payment if any full-time employee is certified to receive an applicable premium tax credit or cost-sharing reduction payment. Generally, this may occur where either:
1. The employer does not offer to its full-time employees (and their dependents) the opportunity to enroll in minimum essential coverage under an eligible employer-sponsored plan; or
2. The employer offers its full-time employees (and their dependents) the opportunity to enroll in minimum essential coverage under an eligible employer-sponsored plan that either is unaffordable relative to an employee’s household income or does not provide minimum value.
For purposes of section 4980H, a ‘full-time employee’ is an employee who is employed on average at least 30 hours per week.”
CON (no)
Con
[Editor’s Note: Based upon a neutral reading of the Patient Protection and Affordable Care Act and bi-partisan third party analysis, this question seems to have a clear and obvious Pro (yes) answer, and ProCon.org has therefore presented the responses in a single column with no opposing perspective.]
