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Firms which do not offer any insurance, have more than 50 employees, and have at least one employee receiving insurance subsidies, they must pay a tax of $2000 per subsidized employee. The tax is applied to all of a firm’s employees (after excluding the first 30), not just those that are subsidized.

For example a firm with 51 employees would pay $42,000 in new annual taxes, and an additional $2,000 tax for every new hire.

For firms that do offer insurance, the penalty is the lesser of $2,000 for every employee (after exempting the first 30) or $3,000) for every employee receiving a subsidy.

For additional detailed illustrations, see this great summary PDF produced by the NFIB. 50 Plus Obamacare Penalty Summary.pdf

What will this mean for your business?

For starters, remember that this penalty only applies to groups with 50 or more employees. So any group right around the 50-employee mark will have lots of incentive to reduce full-time employees. And/or they'll do all they can to not go over 50 employees. Unfortunately for your unemployed friends and neighbors, this will decrease hiring for many companies.

For example, the corporation that owns Olive Garden, and other restaurants, is piloting a program to hire part-timers and never allow them to go full-time. This way, no penalty would be assessed on those employees.

Most of our groups have fewer than 50 employees, which leaves many options open - including dropping your group health insurance altogether.

Watch for more on that in the near future.


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