As most employers know by now, companies with 50 or more full-time equivalent employees are required to offer affordable health coverage that provides minimum value to their full-time employees starting in 2015 or face a significant penalty. Those that don’t offer coverage to at least 95% of their full-timers pay an “across-the-board” penalty of $2,000 per full-time employee with the first 30 excluded. Those that do offer coverage pay a $3,000 on each full-time employee that actually receives a tax credit.
What employers may not know, though, is that the penalty amounts are adjusted annually for inflation. In 2016, the across-the-board penalty increases from $2,000 to $2,160 per year while the per-employee penalty increases from $3,000 to $3,240.
The Kaiser Family Foundation has created a great flowchart to illustrate how the penalties work.