What is Pay or Play?
The Employer Mandate begins January 1, 2015 and you need to be prepared to decide whether you are going to follow the rules and regulations of providing affordable health insurance to your employees (Play) or pay the fines associated with not providing affordable health insurance (Pay). In order to make this decision, there are several things you need to take into account beforehand. It is important to note that the Employer Mandate only applies to “large employers.” If you are a “small employer” you are not required to provide health coverage to full-time employees.
In order to “Play” you must provide minimum essential coverage to your full-time employees that is affordable and fulfills the minimum value. If an employer fails to provide insurance for some or all of its employees, then they must “Pay” a penalty. There are different penalties associated with different scenarios for not providing insurance.
Providing insurance may be cheaper than paying the penalty, or paying the penalty may be cheaper than providing insurance. It all depends on your business and your employees.