Large Business Health Insurance: Options for 2014

As far as health insurance is concerned, a large group employer is defined as more than 50 full-time equivalent employees (FTEs). As for how to determine if you have 50 or more FTEs, check out this post.

Large businesses will have 3 basic health care options come 2014:

  1. Offer employees a fully insured or ASO plan that is both affordable* and meets minimum Essential Health Benefits.
  2. Offer a plan that does not meet these requirements and pay an employer penalty.
  3. Opt to not offer any insurance to employees and pay an employer penalty.

Penalties for failing to offer coverage are as follows:

  • $2000 per each employee after the first 30 (a company with 55 employees would pay a fine on 25 of them) if one worker buys a subsidized plan through the exchange
  • $3000 for each employee getting subsidized coverage if the plans offered through the employer are not considered affordable* for the employee

*Affordable is defined as less than 9.5% of an employee’s compensation, as reported in box 1 of a W-2

Large business

Other changes to come:

  • Waiting periods may not exceed 90 days before health insurance becomes effective for new hires
  • Increased reporting to the Secretary of the Treasury including details regarding employer offered health insurance plans (waiting period, premiums, costs of benefits and how much the employer pays)
  • All plans to be guaranteed issue (no one can be denied due to preexisting conditions)