Under the Patient Protection and Affordable Care Act, employer-provided coverage is considered "unaffordable" if it:
- Costs more than 9.5 percent of the employee's W-2 wages, or
- Doesn’t cover an average of 60 percent of the employee's medical expenses.
If an employer does not provide affordable coverage, the employee can shop for insurance through a public exchange and may qualify for federal tax credits.
Those who are single and make less than about $46,000, or are part of a family of four and make less than about $94,000, may receive a tax credit from the federal government to help pay their premium.
Starting Jan. 1, 2015, employers with 50 or more full-tme equivalent employees may face penalties if they do not provide "affordable" care that meets minimum value specifications (as determined by minimum value calculations).
Coverage must be provided to employees who work an average of 30 or more hours a week. The measurement period can be three to 12 months, with a subsequent stability period that generally cannot be shorter than six months or, if longer, the length of the measurement period.
Starting Jan. 1, 2014, nongrandfathered, fully insured plans in the individual and small group markets and those in the exchanges are required to provide coverage of benefits or services in 10 separate categories that reflect the scope of benefits covered by a typical employer plan. Self-insured small group plans, large group plans, and grandfathered plans are not required to offer essential health benefits.
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