Shared Responsibility Payment

A large employer, including large tribal employers, may be subject to a shared responsibility payment if the employer:

  1. Does not offer coverage to at least 70% (in 2016, 95%) of its full-time employees (and their dependents*), OR
  2. Offers coverage to at least 70% (in 2016, 95%) of its full-time employees (and their dependents*) but the coverage is not affordable or does not provide minimum value;

AND at least one full-time employee receives a premium tax credit or cost sharing reduction in the Marketplace.

*If dependent coverage transition relief does not apply.

Type 1:  If a large employer does not offer coverage or offers coverage to less than 70% (in 2016, 95%) of its full-time employees and one employee receives a tax credit or cost sharing reduction in the Marketplace, the employer will be subject to a shared responsibility payment of 1/12 of $2,000 per full-time employee, not including the first 80 employees (in 2016, 30 employees).   This is approximately $166.67 per employee over the first 80 employees in 2015 and over the first 30 employees in 2016.

For example:

  • In 2015, an employer with 100 full-time employees would pay a shared responsibility payment on 20 employees (first 80 not counted in 2015) for each month the employer does not offer coverage which is $3,333.33 per month.
  • In 2016, this same employer would pay a shared responsibility payment on 70 employees (first 30 not counted in 2016) for each month the employer does not offer coverage which is $11,666.66 per month.

Type 2:  If a large employer offers coverage to at least 70% (in 2016, 95%) of its full-time employees but coverage is not affordable or does not provide minimum value, then employer will be subject to a shared responsibility of 1/12 of $3,000 per full-time employee who receives a tax credit or cost sharing reduction in the Marketplace. This is approximately$250.00 per employee who receives a tax credit or cost sharing reduction in the Marketplace, per month.

For example,

  • In 2015, if four of employer’s full-time employees receive a tax credit or cost sharing reduction, then employer would pay a shared responsibility payment of $250.00 per employee, per month, for each month the employees’ receive a tax credit or cost sharing reduction or $1,000 per month.

Click here [insert link to employer survey] to fill out an easy employer survey to determine your responsibility and find out if you are a large or small employer.