Summary of Coverage Rules vs. Options

Summary of Coverage Rules vs. Options

This chart outlines which rules must be followed and where you have options when providing health coverage to your small business employees. The Patient Protection and Affordable Care Act makes important adjustments to certain rules and options.

Issue Coverage Rules Coverage Options
Whether to Offer Coverage Rule: In 2015 under the Affordable Care Act, employers with fewer than 50 full-time equivalent employees will not have to provide insurance. If you have at least 50 full-time equivalent employees and one receives a government subsidy to purchase health insurance, you will be subject to paying a penalty—whether or not you offer insurance. The penalty does not apply if no employee receives a government subsidy for purchasing coverage nor does it apply to any employer with fewer than 50 full-time equivalent employees. Option: Employers may choose whether to offer coverage at all. There currently is no law or rule requiring a business to offer health coverage to its employees. In 2015 however, businesses with more than 50 full-time equivalent employees will pay a penalty if an employee receives a government subsidy to purchase coverage.
Employer’s Contribution to Premium Costs Rule: Most insurers require employers to pay for 50 percent or more of the cost of monthly premiums for employees. Option: Employers may choose whether to contribute toward premiums for dependents’ coverage. While employees always may extend health coverage to their dependents, the employer is under no obligation to pay for it. Employees may be asked to bear some or all of the cost of dependents’ coverage.
Who Must Be Offered Coverage
Full-Time Employees Rule: The ACA defines full-time employees as those working an average of 30 hours per week, or at least 130 hours per month.
Part-Time Employees Rule: The ACA defines part-time employees as those working less than 30 hours per week. Option: Employers may choose whether to offer coverage to part-time employees. An employer is free to offer coverage only to full-time employees and not to part-time workers.
Spouses & Children Rule: All employees who participate in your group plan are allowed to include their spouses or children under the plan. Under the Affordable Care Act, group insurance plans are required to extend coverage to adult children through age 26. Currently, this provision only applies when an adult dependent’s employer does not offer coverage; in 2014 it applies to all adult children whether or not their employer offers coverage. Option: Employers may choose to expand the definition of child dependent to include children older than 26; age limits vary by plan.
Domestic Partners Rule: If you offer coverage to unmarried domestic partners, the benefits must mirror those offered to married spouses. Option: Employers may decline to offer coverage to unmarried domestic partners.