Penalties under Play or PayEmployer Shared Responsibility

Two Penalties:Subsection (a) Subsection (b)

Subsection ( a ) Penalty

Applies if the employer:Failed to offer substantially all* FT employees

and dependents** an opportunity to enroll in an Eligible Employer Sponsored plan (EESP) for a month: Monthly Penalty = $2000 times # of FT employees minus 30 divided by 12

*”Substantially all” means 95% of full time employees or if greater 5 FT employees**Dependents means children to age 26

Subsection ( b ) Penalty

Applies if the employer:• Offered substantially all FT employees* and dependents

opportunity to enroll in EESP for a month but coverage is not affordable or fails to provide minimum value (A/MV):

Monthly penalty lesser of• $2000 X # FT employees minus 30 divided by 12 OR• $3000 X FT employees with subsidy divided by 12*

*Rationale is, an employer offering coverage should pay less than an employer not offering coverage.

EBIA 1/23 / Slide 21

“Safe Offer”

An employer who offers affordable/minimum value coverage to all FT employees and dependents* makes all FT employees ineligible for an Exchange Subsidy therefore no Penalty.

*children to age 26( including foster and step children)

EBIA 1/23 / Slide 19

Affordable/Minimum Value Coverage

• Coverage is affordable if it costs the employee no more that 9.5% of the employee’s W-2 wages. ( for the employee only coverage as dependent cost is not considered for determining affordability)

• Coverage is Minimum Value if it covers 60% of an individual’s healthcare costs ( actuarial value). Minimum Value calculator available.