Pay or Play Penalty Calculators

The Pay or Play Penalty Calculators in your online HR library have been updated to include the inflation-adjusted penalty amounts for 2015. There are two separate calculators for 2015, depending on an employer’s number of full-time employees (including full-time equivalents):

To use the updated calculators, simply enter data on the number of full-time employees and employees receiving a premium tax credit or cost-sharing reduction for a month, and the spreadsheet will calculate the estimated penalty for the month.

Compliance Timeline
As a reminder, employers with 100 or more full-time employees (including full-time equivalents) are subject to the pay or play requirements starting in 2015, while those with 50 to 99 full-time employees(including full-time equivalents) do not need to comply until 2016 if they meet certain eligibility criteria related to workforce size, maintenance of workforce and overall hours of service, and maintenance of previously offered health coverage.

As employers begin pondering the “play or pay” question, the answer is not necessarily as straightforward as some expected. More than a few employers, it seems, are maintaining the status quo on their health benefit programs and focusing on making sure that their health plan offerings meet the affordability and other requirements under the PPACA.

These employers are not necessarily making a long-term commitment to providing health benefits to employees. Instead, they are postponing a decision until they see:

  • How difficult and costly it is to comply with the “shared responsibility” provision requiring that employers provide coverage to all full-time equivalent employees.
  • How the state health insurance exchanges will operate and what types of plans they will offer at what prices.
  • The impact of all of these changes on the overall cost of health benefits.

All aspects of PPACA compliance will be very specific to the employer involved. Everything from differences in employee demographics and income levels, to hours worked, to benefits strategy will have a tremendous impact on compliance and decision making. However, there are a few key things for all employers to keep in mind.


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