What is the Employer “Mandate”

In 2016, a majority of Americans (49%) received health coverage through an employer, either as an employee or a dependent of an employee.  [How did employer-sponsored health insurance become so widespread in the U.S.? Check out this article for a brief history starting with the creation of Blue Cross in 1929].

While the ACA mandates that individuals have health insurance (which has been made a tad more complicated by the recent tax bill passed by Congress), it does not require employers to provide health benefits to their workers. However, the Employer Shared Responsibility Provision of the ACA stipulates that certain businesses called Applicable Large Employers (or ALE’s) must offer affordable, minimum value coverage or face a financial penalty. That regulatory mumbo-jumbo essentially adds up to a mandate for businesses with more than 50 full-time employees to offer health coverage.

This flowchart should answer any lingering questions about employer responsibilities in terms of health coverage.

 Image from KFF.

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