Sync-ACA Employer Pay or Play Tax Calculator

In 2015, the employer shared responsibility (often referred to as the “employer mandate” or the “pay or play mandate”) requirements under the Patient Protection and Affordable Care Act (ACA) will take effect. The mandate generally requires applicable large employers (ALEs) – employers that employ an average of at least 50 full-time employees, including full-time equivalent employees (FTEs) – to either offer affordable health coverage that provides minimum value to full-time employees and their dependents or pay a penalty if at least one full-time employee receives subsidized coverage through the Health Insurance Marketplace (also known as the Public Marketplace or the Public Exchange).

The employer mandate requires businesses with a combination of 50 or more full-time equivalent employees to provide qualified health care coverage or be subject to a  penalty. This calculator will help you determine if the employer mandate applies to your business, and if the mandate  does apply the calculator will estimate the potential penalties your business could face based on the number of full-time employees. Please note: more in-depth analysis tailored to an employer’s unique situation is required in order to obtain a better understanding of your ACA obligations.

Warnings

  • ALE status is determined on a controlled group basis. This means that two or more companies that have common ownership, or are otherwise related, are often treated as a single employer, and all employees of the controlled group (such as employees across affiliated companies) are counted when determining ALE status. The ACA will apply to such affiliates even if they have fewer than 50 full-time employees or FTEs.
  • Companies must ensure that independent contractors are properly classified. If an independent contractor is misclassified, that individual may be considered an employee for the purpose of determining whether an employer is an ALE.
  • Keep in mind that an employee’s hours of service include each hour for which an employee is paid or entitled to payment and includes hours worked and hours for which payment is due for vacation, holiday, illness, incapacity (including disability), layoff, jury duty, military duty or leave of absence.
  • A full-time employee is an employee who works, on average, at least 30 hours of service per week or 130 hours of service in a calendar month. This includes actual hours worked and periods of paid time off.

The decision to “pay or play” is quite complex and goes beyond comparing the cost of the penalty to the cost of providing coverage since there are numerous tax considerations that must be taken into account. In addition to cost, an employer may want to consider other factors such as culture, employee morale and competitiveness.

Employers with fewer than 50 employees are still exempt from the employer mandate requirements.

The decision to “pay or play” is quite complex and goes beyond comparing the cost of the penalty to the cost of providing coverage since there are numerous tax considerations that must be taken into account. In addition to cost, an employer may want to consider other factors such as culture, employee morale and competitiveness.

Employers with fewer than 50 employees are still exempt from the employer mandate requirements.

Disclaimer

This calculator is designed to provide a sample estimate of your potential tax penalty for illustrative purposes only. It is not intended to provide a definitive answer in your specific situation. Borislow Insurance does not provide legal or tax advice.

Below please enter your Employee Counts and press “Calculate”

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