Employers with 50+ full time employees who chose to opt out of providing Minimum Essential Coverage (MEC) face multiple tax penalties under the ACA employer mandate. If the employer offers MEC plans, they avoid a yearly $2,000 tax per employee and the employee who enrolls satisfies the individual mandate. Consequently, if the plan offered by the employer does not have Minimum Value (MV) the employer can still be subject to a tax of $3,000 for employees who decline the employers’ plan and shop at a state or federal exchange. Minimum value plans must cover at least 60% of the costs of services covered under the plan and cost no more than 9.5% of the employees W-2 earnings. If an employer wishes to avoid all potential penalties under ObamaCare, it may be in their best interest to offer both a MV plan and a MEC plan.
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