Summary of Law for Employers

The Affordable Care Act (ACA) established new standards and opportunities for access to health care in the United States. Congress enacted this law in March 2010.

Now almost everyone must have insurance. To help enforce these rules, the law set up new reporting requirements and penalties. They affect both individuals and employers.

Here are a few highlights of the law:

  • Large employers – those with 50 or more full-time-equivalent employees – must provide health insurance that meets certain standards, or potentially pay a penalty.
  • Smaller employers and individuals have another option for buying coverage. It’s called a public exchange, or marketplace.
  • If you offer health insurance to your employees, you or your insurance company must provide a Summary of Benefits and Coverage in a standard format.
  • Health insurers must spend a set percentage of premium dollars on health care expenses. If health insurers don’t hit this target, they have to send you a rebate. This rule is called the minimum medical loss ratio rule. It applies only to fully insured plans.
  • If the cost of health insurance for some of your employees exceeds a certain dollar amount, you may have to pay an excise tax beginning in 2022. Some people call this the Cadillac tax.
  • Reporting rules are in effect to confirm that you and your employees comply with the law.
  • Most health plans must include preventive care at no cost  to the individual.
Under 50 employees:
50 or more employees: