Health Reform Penalty Calculator

A key issue in Health Care Reform is the employer mandate, seen here as employer mandate penalties for failure to offer or an offer of unaffordable coverage. Financial penalties apply to employers with more than 50 full-time or full-time-equivalent employees who either do not offer coverage to full time employees (and one full-time employee receives a tax subsidy) or offers coverage to full-time employees and the cost exceeds a threshold of a full-time employee’s income and the employee receives a tax subsidy. The employer mandate penalties begin in 2014.

This calculator is designed to help you better understand your potential mandate penalty exposure. For a more detailed, in-depth penalty exposure analysis personalized to your unique situation, contact WGA's Health Reform Advisory Team at healthreform@WGAins.com. To view a sample report, click here.

Number of full-time employees
(Full-time employees work 30 hours or more per week on monthly average.)

Total HOURS that ALL part-time employees work in a MONTH on average
The calculator determines the number of full time equivalents [total part-time hours/month divided by 120 (fulltime definition under the law) which in turn is added to the number of full-time employees to determine whether you meet the 50-employee penalty threshold. Penalties are assessed based on actual full-time employees and not full-time employee equivalents.

Number of full-time employee equivalents³

Results

Exempt

You do not have enough (50 required) full-time or full-time equivalent employees to be subject to the penalty mandates. This caclulation is done on a month-to-month basis. Your status can change based on number of employees and hours worked by part-time employees.

Scenario #1

If you do not to provide health coverage to your full time employees AND at least one individual receives subsidized coverage⁴ your annual penalty owed to the Federal government will be ⁵.

Scenario #2

If you do provide qualified health coverage to full-time employees, AND one or more employees receives subsidized coverage⁴ from the state Exchange, your penalty for each employee receiving subsidized coverage will be $3,000⁶.

Possible penalties based on providing coverage and still having individuals eligible for subsidized coverage:

# of Employees Receiving Subsidy
% of Workforce Receiving Subsidy
Penalty Amount

³No penalty is paid on part-time employees or full-time employee equivalents.

⁴If total employee cost exceeds 9.5% of employee's family income, then the employee is eligible for subsidized coverage in the new state-based Exchange purchasing group.
⁵The first 30 full-time employees are exempt from the mandate penalty.
⁶The penalty amount is the lesser of the actual penalty or $2,000 times all full-time employees minus the first 30.

For questions about National Healthcare Reform, please contact our team via email at healthreform@WGAins.com or your WGA Client Executive or Client Manager.