News & Updates
July 1, 2016
Under the Affordable Care Act (ACA), Medicare-eligible individuals are ineligible to receive premium tax credits. As a result, employers with Medicare-eligible employees should consider how those employees may impact their potential liability under the ACA's employer shared responsibility provisions (also known as "pay or play").
For 2016, applicable large employers (ALEs)—generally those with at least 50 full-time employees, including full-time equivalent employees (FTEs), in the preceding calendar year—will be liable for a pay or play penalty only if:
Medicare-Eligible Employees and Pay or Play
As highlighted in a recent IRS memorandum, because Medicare-eligible individuals are ineligible to receive premium tax credits, ALEs that offer coverage to at least 95% of their full-time employees (70% for the 2015 plan year) and their dependents will not owe a pay or play penalty for any Medicare-eligible individual. For ALEs that do not offer coverage to at least 95% of their full-time employees (70% for the 2015 plan year) and their dependents, however, Medicare-eligible full-time employees could potentially trigger (or increase) the penalty owed.
To learn more about an employer's responsibilities under the ACA, please visit our Pay or Play section.