The fifth question that comes up a lot is, “What happens if I don’t comply? What happens if I don’t offer health coverage,” and there’s penalties that come into play. If you don’t offer any coverage at all then the penalty and it’s not just to your employees, you have to offer coverage to your employees and your dependents up to the age of twenty six. If you don’t offer any coverage at all, you’re subject to a penalty of two thousand dollars per employee and that’s an annual penalty but it’s paid monthly.
Depending on how many employees you have, that can really add up. One provision that is in the healthcare law that’s helpful for the smaller businesses who are just at that fifty mark is that the two thousand dollar per employee penalty only applies to your number of employees beyond thirty. You can subtract the first thirty employees out. For example, if you had fifty employees, you’re really only paying that two thousand times the last twenty employees so you’d be paying a fine of forty thousand dollars for the year.
The next step where you may encounter some penalty is if you offer coverage but it’s not meeting those two requirements of minimum value and affordable care. If you file short on either of those prongs where either the minimum values, they’re not there, you’re not offering sixty percent of the potential cost under the plan or the cost is more than 9.5 percent of the employees household income, you’re still going to be subject to the penalty to the extent that any of your employees go out on the exchanges and receive a premium tax credit. That penalty is three thousand dollars for every employee who goes out and gets insurance and qualifies for that tax credit. It’s less because it’s only those employees who are going out and getting that credit but it still adds up.