Beginning in 2014, employers may be subject to "play or pay" penalties under the Patient Protection and Affordable Care Act. Play or pay penalties refer to assessments to employers who fail to offer employees minimum essential health coverage that is both "affordable" and provides "minimum value." Employers should begin reviewing their health coverage options now, since the employer's 2013 information will determine if the employer is subject to the play or pay penalties for 2014. Employers should estimate their potential liability for the penalties, consider the financial implications of offering or not offering health coverage, and execute strategies to reduce or eliminate their play or pay penalties. Employers may also need to amend their health plan documents and summary plan descriptions to reflect any changes made to the plan's eligibility rules and coverage options.
The following chart provides the basic analysis used to determine an employer's potential play or pay penalty. Additional rules, safe harbors, exceptions and transition periods may also apply in specific circumstances.
Click on the chart to download as a PDF.
For further information about how the Patient Protection and Affordable Care Act affects your health plans, contact any of the following:
Joshua T. Natzel (Author)
Associate, Employee Benefits and Executive Compensation
Edward J. Wegerson
Partner, Employee Benefits and Executive Compensation
Anthony A. Lusvardi
Partner, Employee Benefits and Executive Compensation
The information provided above is intended for general informational purposes only. It should not be construed as legal advice or legal opinion on any specific facts or circumstances and you are urged to consult a Lindquist & Vennum LLP attorney or one of your own choosing concerning your situation and specific legal questions you have.
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