Under the ACA employer shared responsibility ('pay or play') rules, a large employer that fails to offer affordable, minimum-value coverage...
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
The employer shared responsibility provision applies to large employers (generally those with 50 or more full-time-equivalent employees) and is commonly called 'pay or play.' The employer may either offer its full-time employees affordable, minimum-value coverage or pay a penalty. The penalty is triggered only when a full-time employee receives a premium tax credit through the exchange because the employer's coverage was unaffordable, failed minimum value, or was not offered. The rule is designed to push large employers toward offering coverage rather than shifting costs to the public exchanges.
Why the other options are wrong
- B) The penalty applies only where an employee actually obtains subsidized exchange coverage; it is not an all-employee premium payment.
- C) The law penalizes noncompliance; it does not force an employer to cancel its existing group plan.
- D) The small business credit is for small employers and is unrelated to the large employer penalty.
Memory hook
Offer affordable, minimum-value coverage — or pay when workers land on the exchange.