Large Employers without a Group Health Plan


This year the Employer Mandate went into effect.

The Employer Mandate is a $2,000 tax per employee per year on large employers that do not provide a group health plan.

In 2015 a large employer is one that has 100 or more employees – get help calculating your employee count– and in 2016 that number drops to 50 employees.

For large employers that offer a Group health Plan (GHP), 2015 is a non-event, as long as it is affordable for employees. For employers that do not offer a GHP, procedures need to be put into place well before the 2016 tax season.

  1. First, if you are close to 50 or 100 employees you need a mechanism to measure (prove) that you are not a large employer. It is not clear how stringent the IRS will be on these calculations.
  2. Second, it would be prudent to show that you did not shift too many employees from full time to part time in 2014 to avoid penalties in 2015.
  3. Finally you need to designate your part time employees. You do not pay the Employer Mandate penalty on part time employees (those that work less than 30 hours per week on average). It will be important to differentiate, or more specifically prove the difference between the part time and full time employees.

Once again it is not clear how closely the IRS will scrutinize the difference but record keeping will be a key in any review or audit.

Arin J. Carmack