Under the Affordable Care Act, businesses with 50 Full-Time Equivalent (FTE) employees or more are required to provide some form of assistance to their personnel, either by offering affordable coverage directly to their employees or by making an Employer Shared Responsibility Payment. On the other hand, businesses with fewer than 50 FTE employees do not have to provide health insurance for their employees, though they may be able to claim the small business health care tax credit if they do.

Individuals who do not receive health insurance through their employer must purchase an individual or a family Qualified Health Plan to be in compliance with the law and avoid penalties. Since the law’s inception, many have opted to pay the penalties rather than purchase a Qualified Health Plan because the cost of premiums is greater than the cost of paying the penalties. This trend, unfortunately, has left many without insurance when it is needed most.

  1. Offset the costs of typical Qualified Health Plans for individuals and families.
  2. Find alternative, cost-effective policies that comply with the law.
  3. Enroll in programs that combine individual and group benefits to avoid penalties.

Individual Mandate Penalty

  • Greater of 2% or $325/$975 (family) (2015)
  • Greater of 2.5% or $695/$2,085 (family) (2016)

 Exchange Subsidies & Premium Tax Credits in 2014 dollars

  • 134% FPL = $15,417/$31,389 – 3.06% of Income = $472/$960
  • 250% FPL = $28,763/$58,562 – 8.05% of Income = $2,315/$4,714

We know how important it is for businesses, families, and individuals to save money. For instance, many households depend on an annual tax refund to pay for essential goods and services and save for the future. Unfortunately, if you are non-compliant with the health insurance law, you may have to forfeit some or all of your refund check. Under the law, the IRS has the authority ensure that you or your business is compliant. To address these concerns, we are working tirelessly on a Minimum Essential Coverage programand other solutions that will help to drive down premiums and penalties.

While changes to the law may be forthcoming, you can rest assured that IMPACT Business Solutions Group remains diligent in its quest to keep you, your family, and your business compliant with the law and covered with affordable insurance. Please contact us if you have any questions. Let us know how we can help!

Individual Mandate Penalty for 2016

1. 2.5% of household income
2. $695 per adult and $347.50 per child under 18
3. Maximum: $2,085
4. You pay whichever of the above is highest