You Can’t Afford Not to Provide Healthcare Benefits

Many employers are surprised to learn the exorbitant fines they can incur if they do not provide healthcare benefits to their employees. The fines can easily reach thousands of dollars each month.

Use our Pay-or-Play Calculator to determine the amount of fines your company may be subject to.

Should Your Business Pay or Play?

What you will learn

  • Does my company qualify as a large employer under ACA?
  • What potential penalties is my business subject to if I don't offer my employees benefits?
  • What qualifies as an unaffordable plan under PPACA? How can I determine if my business's plan is unaffordable?

What you will need

  • Total number of enrolled employees in your plan(s)
  • Monthly premium rate for single coverage in your plan (or in lowest-cost plan if you offer more than one)

Does my company qualify
as a large employer by aca?

step01Determine whether you are subject to the employer mandate by calculating how many full-time equivalents (FTEs) your company has.

  1. Average number of full-time employees (working 30+ hours per week)

  2. Total number of part time hours worked per year by all part time employees (including seasonal part time employees)?


How This Works

Under PPACA, full-time equivalents are calculated by taking 1.) the number of full-time employees that work 30+ hours a week, plus 2.) the total number of part time hours per year, divided by 1440. If the total number of FTEs is 50 or more, the employer is considered to be a large employer.

Does my company qualify
as a large employer by aca?


You have more than 50 full-time equivalent employees. The government considers you a large employer.

What This Means

  • You must provide insurance to at least 95% of your actual full-time employees.
  • The insurance must pay for at least 60%, on average across the plan, of an employee's health care costs in a given year.
  • Insurance costs must not exceed 9.5% of household income for any employee.

You will be Taxed!!

Does my company qualify
as a large employer by aca?


It looks like you have fewer than 50 full-time equivalent employees. This means that you are likely to be exempt from the mandate to offer health coverage to your employees. However, you still have obligations under the law.

What This Means For You:

  • You and Your Employees can take advantage of Self-Funded Employee Benefits
  • Your Employees can be taxed each year for not having coverage
  • Recalculate your employee numbers each year to ensure compliance
  • Tell your employees about the healthcare marketplace and opportunities they offer for individual coverage
  • Keep up with changes to the health care law, to make sure you continue to comply

You Qualify for Self-Funded Employee Benefits!

What is my cost to pay or play?

step03Determine what the cost will be for providing insurance to your employees.

  1. Do you offer health benefits for your employees?


What is my cost to play?


Number of full-time equivalents (FTEs): 80

Number of full-time employees enrolled: 31

Monthly premium for employee-only coverage: $0.00

What you pay: $0.00

What your employees pay: $0.00

Is this plan unaffordable?

Plan is Unaffordable for all employees with W2 income less than:


An employee in this category that receives a subsidy on the exchange will result in the employer paying a $3,000 annual penalty

Plan is unaffordable

The Fine Explained
PPACA has determined that an employer's health benefits for their employees are considered affordable as long as the employees' portion of the premium does not exceed 9.5% of the employee's income. Employers should base this on single coverage in the lowest-cost benefit plan they offer. A $3,000 fine will be assessed for each employee who 1) falls in the unaffordable category 2) receives a subsidy on the public exchange.

What is my cost to Pay?

step04Not offering any health benefits? Determine what potential penalties your business may be subject to if you don't offer employees benefits.

As a large employer, if you do not offer health benefits your estimated fine will be:
$8,333 per month
$100,000 per year

How this works

PPACA has determined that if a large employer does not offer coverage, they will be subject to an annual penalty if a premium credit for an exchange plan is given to any of its full time employees. To determine this annual penalty, the following calculation is used: