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Mandate Overview

Understanding the Employer Mandate

Also known as the employer-shared responsibility provision or “pay or play,” the employer mandate requires eligible employers to offer health insurance that is affordable and provides minimum value to full-time employees and their dependents.

  • Dependents include children up to age 26, excluding stepchildren and foster children.
  • Coverage must be available through the end of the month in which they turn 26.
  • Because spouses are not considered dependents, employers are not required to offer coverage to these individuals.

Will the Mandate Impact Your Business?

The mandate applies to employers with 50 or more full-time employees or full-time equivalents. Eligibility is based on the number of full-time equivalent employees, including part-time employees. This means that an employer that is considered a small group for purposes of participating in the Small Business Marketplace may also be subject to the mandate. Employers should consult their tax or legal adviser for more guidance.

Employer Size

2015 Plan Year

2016 Plan Year and Beyond

1-49 full-time employees/equivalents

Does not apply

Does not apply

50-99 full-time employees/equivalents

Does not apply

Must offer coverage to 95% of full-time employees and dependents to age 26*

100-plus full-time employees/equivalents

Must offer coverage to 70% of full-time employees and dependents

Must offer coverage to 95% of full-time employees and dependents*


*This may allow the employer to avoid the penalty for not offering insurance [4980H(a)], but the employer penalty for not meeting minimum value and affordability requirements [4980H(b)] may still apply.