The healthcare reform law's delayed employer mandate provision finally takes effect this month, and employers are evaluating how it will affect their businesses in 2015 and beyond.
The Affordable Care Act requires businesses with 100 or more full-time employees to offer affordable health coverage to at least 70% of their workers in 2015. In 2016, that rule expands to companies with 50 or more full-time employees, and at least 95% of employees must be offered health insurance. The employers' health plans have to cover at least 60% of average healthcare expenses, and employees' portion of the premium cannot exceed 9.5% of their household income.
Employers that don't offer affordable coverage must pay a penalty. The provision is expected to generate $130 billion in new revenue to fund the law through 2023, according to the Congressional Budget Office. But the employer mandate is expected to be a big repeal target this year for Republicans, who now control both chambers of Congress.
Conservatives have long argued that forcing employers to pay for health insurance would hurt small businesses and prompt them to keep their full-time head counts under 50.
“The employer mandate threatens to penalize businesses for failing to offer affordable coverage, when—more than ever—people need jobs and employers need help growing and should be encouraged to hire more employees,” the U.S. Chamber of Commerce contends on its website.