Groups with more than 50 employees are required to offer a health plan as defined by ACA or potentially be subject to one of the two excise taxes. Groups across the nation are trying to figure out whether it will be more costly to offer a plan or simply pay the tax penalties. If they offer an MVP plan, they must subsidize the premiums to make it affordable for their employees.
- Penalty 1: If a group offers no coverage at all, they will pay $2,160 per employee per year as an excise tax.
- Penalty 2: If the group offers a plan BUT it does not meet the minimum value standard or is not affordable, the group will be subject to a $3,240 excise tax on any employee who applies and receives a healthcare subsidy from the federal government.
We provide Minimum Essential Coverage (MEC) so that clients can avoid the $2,160 tax penalty for non-compliance and the individual employees can avoid their own penalties for lack of coverage. There is no affordability test on the MEC offering, so contribution from the employer can range from 0 – 100%.
We can also provide Minimum Value Plans (MVP) so that clients can avoid the $3,240 tax penalty for each employee that goes to the Exchange for coverage. You can prevent these penalties by offering MVP, even if no employees enroll in the plan.