The health care law does not require employers to provide health insurance for their employees. However, employers with 50 or more full-time equivalent employees or employers that do not offer insurance, offer insurance that is unaffordable or offer coverage that does not meet a pre-determined minimum value will be subject to a penalty beginning in 2014.
Fees for not meeting the coverage requirement
If the employer does not offer coverage and at least one employee receives a subsidy in Covered California's Individual Exchange, the fee is $2,000 annually times the number of full-time employees not counting the first 30 employees.
If the employer offers coverage but its insurance plan is inadequate or unaffordable, employees can choose to buy coverage in Covered California’s Individual Exchange and receive a premium tax credit. The fee to the employer is $3,000 annually for each full-time employee receiving the credit, up to a maximum of $2,000 times the number of full-time employees not counting the first 30 employees. (This is the same as the maximum for employers who do not offer coverage).
An insurance plan is deemed “inadequate” if it does not pay at least 60 percent of health care expenses for a typical population.
An insurance plan is deemed “unaffordable” if employees have to pay more than 9.5 percent of family income to purchase it.
Fees are increased each year by an amount equal to the growth in insurance premiums.