Watch out: A lot of employers have at least some workers for whom health coverage would be deemed “unaffordable” — and that could mean trouble. Are you one of them?
More than one-third (38%) of employers with between 10 and 499 workers currently have at least some employees who put more than 9.5% of their total household income toward health care premiums, according to a recent Mercer study.
And under a health reform rule that’ll go into effect in 2014, employers will be penalized if their health insurance premiums paid by full-time employees exceed 9.5% of workers’ household income.
Such coverage will be deemed unaffordable by the feds. And if an employer with unaffordable coverage has at least one employee that gets government assistance to buy individual coverage, that employer will have to pay $3,000 per full-time worker per year (up to a max of $2,000 x the number of full time employees after the first 30).
One problem: Determining every worker’s household income could be a huge headache for employers.
Solution: For now, it may be wise to take a conservative approach to the calculation as Mercer did when determining that 38% of companies could be penalized. Mercer assumed that each employee’s pay equaled total household income — and it may be smart for employers to do the same.
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