Affordable Care Act Penalty structure:

 

Individuals:

You will pay the greater of the percentage of household income OR the flat amount per person not covered/per month, up to a maximum of three times the adult penalty.

 

Year	Percentage of household income (including children who work)	Penalty per adult in the household	Penalty per child in the household	Maximum Penalty per household (3X the adult fine)
2015	2% or	$325	$162.50	$975
2016	2.5% or	$695	$347.50	$2,085
2017***	2.5% plus

 

***For 2017 and later years, the fines are expected to be increased for inflation.

 

 

Small Employers:

 

Small Employers can be fined in two ways:

 

• Penalty for Not Offering Coverage: An employer with 50 or more FTEs that does not provide health insurance that meets the “minimum essential coverage” requirements will be subject to a penalty of $2,000 per year multiplied by the number of FTEs, minus 30.So, for example an employer with 100 FTEs would be subject to a penalty equal to:
  (100 – 30) x $2,000 = $140,000
• Penalty for Employee Contribution: If a company offers health insurance coverage that meets the minimum requirements, but requires some employees to contribute more than 9.5 percent of the employee’s W-2 wages (safe harbor), and those employees obtain health insurance through the public exchange and they receive a subsidy for coverage; then the employer would pay a penalty of $3,000 per employee receiving the subsidy.

An employer who offers health insurance coverage could still be subject to a penalty:

Example: an employer with 100 FTEs offers coverage that meets the minimum essential coverage requirements but 10 employees pay more than 9.5 percent of their W-2 wages (safe harbor) – AND the employees obtain a subsidy for coverage in the Oregon Exchange – then the employer would pay a fine for each employee receiving the subsidy or 10 FTEs x $3,000, or $30,000.

The maximum penalty for an employer with more than 50 employees that offer coverage but requires employees to pay more than 9.5 percent of an employee’s wage would be: total FTEs minus 30 FTEs times $2,000. The penalty will not be higher than the employer who offers no coverage.