On March 23, 2010, President Barack Obama signed into law a sweeping reform of the nation’s health-care system now known as the Patient Protection and Affordable Care Act,more commonly known as "ObamaCare." Of importance to employers, on Jan. 1, 2014, the so-called "Employer Mandate" goes into effect, requiring large employers to offer health coverage to full-time employees and their dependents (children up to age 26, but not spouses) or risk paying a penalty. As a result, large employers will be forced to make a choice to either "play" by offering health coverage, or potentially "pay" a penalty to the IRS for failing to offer such coverage. This "play or pay" scheme, called "shared responsibility" in the statute, has become known as the Employer Mandate.
Although the Employer Mandate does not become effective until 2014, determination as to whether an employer is an "applicable large employer," in some instances, will be determined based upon the average number of employees the employer had during a six-month "look-back" period in 2013. This article will discuss: (1) how the act determines "applicable large employer"; (2) what constitutes "affordable" coverage under the act; (3) employers’ obligations under the act; and (4) the penalties for noncompliance.
