Large employers (with 50 or more employees) must pay a $3000 fee to the US government annually for each employee who meets these two conditions:I bet your initial reaction might be, "Yikes! You mean I gotta pay $3000 fee for any employee that goes to some other plan, like one of those exchanges, and gets a government subsidy to do so?"
- the employee is offered an an eligible minimum essential coverage plan sponsored by the employer, but instead goes to another minimum essential coverage plan, and
- the employee then receives a tax credit or cost-sharing reduction benefit from the government.
But you won't find that language in the Senate Bill. Instead, you would find this language (underlinings are mine):
SEC. 1513. SHARED RESPONSIBILITY FOR EMPLOYERSSo what is an "assessable payment?" Since it is "imposed" on employers, could it be considered a "tax" a "fine," a "fee," and/or a "penalty?" Of course, "assessable payment" is so bureaucratic in its tone that it is stripped of all real meaning. Perhaps that is the writer's intent.
. . .
‘‘(c) LARGE EMPLOYERS OFFERING COVERAGE WITH EMPLOYEES WHO QUALIFY FOR PREMIUM TAX CREDITS OR COST-SHARING REDUCTIONS.—
‘‘(1) IN GENERAL.—If—
‘‘(A) an applicable large employer offers to its full-time employees (and their dependents) the opportunity to enroll in minimum essential coverage under an eligible employer-sponsored plan (as defined in section 5000A(f)(2)) for any month, and‘‘(B) 1 or more full-time employees of the applicable large employer has been certified to the employer under section 1411 of the Patient Protection and Affordable Care Act as having enrolled for such month in a qualified health plan with respect to which an applicable premium tax credit or cost-sharing reduction is allowed or paid with respect to the employee,then there is hereby imposed on the employer an assessable payment equal to the product of the number of full-time employees of the applicable large employer described in subparagraph (B) for such month and 400 percent of the applicable payment amount.
What is the "product of?" Well, it means to multiply. In other words, take the number of employees who fulfill all the requirements of section B in this excerpt and multiply that number by "400 percent of the applicable payment amount" to get that OTHER amount, the "assessable payment." Clear?
Oh, no, wait!!...what pray tell is the "applicable payment amount" in the other part the this multiplication problem? Fortunately, or unfortunately, it is defined a little further down in the bill, on page 352.
‘‘(1) APPLICABLE PAYMENT AMOUNT.—The term ‘applicable payment amount’ means, with respect to any month, 1⁄12 of $750"Now, here's a quiz for you. Is the applicable payment amount (a) $750 each month (b) $750 annually (c) $62.50 each month (d) $62.50 annually (e) b and c or (f) all of the above?
Give up? Well, it appears -- and I am guessing here -- to be $750 annually, so the answer is (e).
All right, now that we have all the numbers, suppose we are (1) a large employer with 50 or more employees and (2) have only 1 employee who qualifies under section B above (remember that??). What is our "assessable payment" annually?
Here you go.
(1) x $750 x 400% = $3,000.
I think.
Of course, it would be simpler and clearer to say this (assuming I am right about all this):
Of course, it would also be more politically hazardous.Large employers (with 50 or more employees) must pay a $3000 fee to the US government annually for each employee who meets these two conditions:
- the employee is offered an an eligible minimum essential coverage plan sponsored by the employer, but instead goes to another minimum essential coverage plan, and
- the employee then receives a tax credit or cost-sharing reduction benefit from the government.
