Coverage and/or Penalty


How will the health care reform law’s employer mandate, often called the “free-rider” penalty, affect my business?

In 2014, certain employers will either have to:

  1. offer all full-time employees (and their dependents) prescribed coverage; or
  2. potentially pay a penalty if any full-time employees “free-rides” on the system by receiving a premium tax credit and using it to purchase coverage in the exchange.

The chart below will help you determine if your business has to offer coverage and/or pay a penalty. Download the chart as PDF.


The materials on this website have been developed for educational purposes only. We urge you to consult with an attorney or benefit consultant to understand your legal obligations under the law. In many instances, the rules have yet to be written. Experts are continuing to debate how various provisions of the law will be implemented and enforced. Many basic elements may change and there are numerous exceptions. Please contact an attorney or benefit consultant to verify how the law will affect your specific company, benefit offering, and scenario.