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Human Resources

Affordable Care Act Help for Employees: What You Need to Know Now

David Peasall, VP, Human Resources
by David Peasall, VP, Human Resources on December 4, 2013

Affordable Care Act Emplyer MandateThe Affordable Care Act affects everyone – both employers and their employees. With health care reform, your employees are required to obtain health insurance, whether you provide it or not. Every individual in America needs to enroll in a health insurance plan by March 31, 2014 or they will face a tax penalty. It might be helpful for you to provide your employees with some guidance as to what is required of them – the different plans they can select from – and the penalties they could face if they choose not to get coverage.

1. The Individual Mandate is a major portion of health care reform and means that as individuals, we must each obtain at least minimum essential coverage (qualifying health coverage) in 2014 or pay a tax penalty when we file our 2014 tax return in the beginning of 2015. It's important to remember that someone who pays the penalty does not have health insurance coverage.

2. The penalty for not obtaining coverage in 2014 is calculated in one of two ways. You’ll pay whichever of these amounts is higher:

  • 1% of your yearly household income (the maximum penalty is the national average yearly premium for a bronze plan); or

  • $95 per person for the year ($47.50 per child under 18). The maximum penalty per family using this method is $285.

3. To avoid the penalty tax you need insurance that qualifies as minimum essential coverage. If you're covered by any of the following in 2014, you're considered covered and don't have to pay a penalty:

  • Any Marketplace (state/federal exchange) plan

  • Any employer plan (including COBRA), with or without “grandfathered” status, including retiree plans

  • Medicare

  • Medicaid

  • The Children's Health Insurance Program (CHIP)

  • TRICARE (for current service members and military retirees, their families, and survivors)

  • Veterans health care programs (including the Veterans Health Care Program, VA Civilian Health and Medical Program (CHAMPVA), and Spina Bifida Health Care Benefits Program)

  • Peace Corps Volunteer plans

  • Self-funded health coverage offered to students by universities for plan or policy years that begin on or before Dec. 31, 2014

  • Other plans may also qualify so be sure to ask a health coverage provider

4. You may qualify for an exemption from being required to obtain coverage or pay a penalty if:

  • You’re uninsured for less than 3 months of the year

  • The lowest-priced coverage available to you would cost more than 8% of your household income

  • You don’t have to file a tax return because your income is too low

  • You’re a member of a federally recognized tribe or eligible for services through an Indian Health Services provider

  • You’re a member of a recognized health care sharing ministry

  • You’re a member of a recognized religious sect with religious objections to insurance, including Social Security and Medicare

  • You’re incarcerated and not awaiting the disposition of charges against you

  • You’re not lawfully present in the U.S.

  • You have a hardship (Hardship exemptions must be applied for)

5. For specific information on the details above, go to the federal government health care website at or call 800-318-2596. You can also visit or go to the Internal Revenue Service website at to obtain further information.

This information is available as a downloadable guide that you can distribute to your employees. Click here to take advantage of this helpful Affordable Care Act employer tool.

David Peasall, VP, Human Resources
David Peasall, VP, Human Resources

David Peasall joined FrankCrum in 2010. Since that time, he has served as the Vice President of Human Resources. Serving in the Army, he began his 20+ year career in human resources and benefits administration and has held several management positions within the corporate and public human resources environments overseeing employee benefits sales and administration, recruitment, compensation, employee relations, organizational development, and compliance. He has the nationally recognized designation of Senior Professional in Human Resources (SPHR), PPACA certification from NAHU, and a Bachelor’s degree from Barry University with a dual major in Human Resources Management and Health Services Administration. He has written for the Society for Human Resources Management, HR Insight, Proyecto Magazine, and for online publications in the restaurant and health care industries. While not at work, this Florida native loves spending time with his family, preferably boating, fishing, and diving the beautiful waters of Florida.