When Anything Less than 95% is a Failing Grade: An Update on the Employer Shared Responsibility Penalties

Nancy K. Campbell • May 26, 2016

As a reminder, effective January 1, 2016, employers must offer minimum essential coverage to 95% or more (up from 70% or more for 2015) of their full-time employees and their dependents each month or pay a very steep penalty.  Missing the mark even slightly, for example coming in at 94%, will require the employer to pay a $2,000 annual penalty for each full-time employee (minus the first 30 full-time employees).

The rules are explained in more detail in our Health Care Reform’s Employer Shared Responsibility Penalties: A Checklist for Employers , which I have updated to reflect certain recent guidance.  Most importantly the revised Checklist:

  •  now reflects how the penalties are adjusted each year (see footnote 7 of the Checklist for more information);
    • the $2,000 subsection (a) penalty is $2,080 for 2015 and $2,160 for 2016.
    • the $3,000 subsection (b) penalty is $3,120 for 2015 and $3,240 for 2016
  • explains how the 9.5% affordability threshold under the safe harbors  is adjusted each year;
    •  the 9.5% threshold under the safe harbors is 9.56% for plan years beginning in 2015, 9.66% for plan years beginning in 2016, and 9.69% for plan years beginning in 2017
  • includes a reminder that in determining affordability, employers must consider employer contributions such as HRA contributions and flex and opt-out credits under cafeteria plans (see footnote 9 of the Checklist for more information);
  • refers to additional guidance in Notice 2015-87 on how hours of service are counted; and
  • includes a reminder that the Cadillac tax, which is now set to take effect in 2020, may impact coverage that may be offered in 2020 and later years.

Employee burnout: what it is and how to prevent it

By Mardy Gould • May 24, 2024
Employee burnout has become an epidemic in today’s modern workplace. So much so that the World Health Organization (WHO) officially recognizes it as an “occupational phenomenon.”1 While many used to consider mounting workplace stress an individual employee problem, these days, it’s become an employer’s responsibility to prevent burnout before it hurts productivity and business performance—not to mention your employees’ physical and mental health. Luckily, you can prevent burnout from affecting your workforce in several ways. This article will explore the causes and signs of employee burnout and the steps you can take to create a positive work environment where employees feel safe from toxic stress levels.

Form 720 and PCORI fee FAQs

By Mardy Gould • May 23, 2024
If you're a small business owner, you may have heard of the acronym PCORI and the fees that come with it. But what is PCORI, and how does it apply to your organization? Under the Affordable Care Act (ACA), sponsors of self-insured health plans must pay a fee to fund the federal Patient-Centered Outcomes Research Institute (PCORI). PCORI is an independent organization the ACA created to conduct research to help healthcare consumers make better decisions for their specific needs and outcomes. It also performs research related to clinical effectiveness. Employers offering a self-insured medical reimbursement health plan, such as a health reimbursement arrangement (HRA), must pay this fee by July 31 each year via Form 7201. This fee was initially set to expire in 2019, but Congress extended it through September 30, 20292, due to the Further Consolidated Appropriations Act of 20203.
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