The Kronos ACA Estimator approximates the costs of either offering insurance to your full-time employees or paying the $2,000 per-person, per-year penalty.* This helpful tool allows you to estimate your “pay” costs (cost of penalties) or “play” costs (cost of benefits) with your current number of employees as well as input potential scenarios based on projected changes to the full-time/part-time classification under the ACA.
*This estimate is based on certain assumptions described in the disclaimer below. Note that under certain circumstances, other penalties under the ACA may apply. Also note that the $2,000 penalty will be inflation-adjusted starting in 2015.
Annualized Simple Reclassification Impact Estimate
Cost of Insurance
Cost of Penalty
Model Scenario
Change the Full-Time field below to see how changes to your workforce mix affect healthcare expenses!
Cost of Insurance
Cost of Penalty
Estimated cost implications of change in your ACA strategy:
1st Year:
Over 5 Years:
ACA Estimator Lite (Kronos) produces an estimate of potential expenses associated with ACA compliance. The estimate is not designed to substitute for the client’s own in-house or third-party legal, consultancy, compliance, accounting, human resources, or finance counsel. Full terms and conditions.
Full Terms and Conditions
“Playing” assumes minimum essential coverage is offered to at least 95% of FT employees and their dependents within 90 days of date of hire or classification as full-time employee.
IMPORTANT NOTE: if the 95% offer requirement is not satisfied, and one full-time employee receives a tax credit for insurance purchased on an exchange, the $2000 per FT employee penalty is applied to all FT employees (even those who are offered coverage under the employer health plan). Thus if the 95% offer requirement is not satisfied, the employer is at risk for the penalties calculated under the “pay” option, plus the cost of providing health insurance for those employees offered coverage.
In general, a full-time employee is any employee (including any employee classified as temporary, “part-time” or irregularly scheduled) who is employed on average at least 130 hours of service per month.
- Assumes the employer has 50 or more full-time equivalent employees.
- Assumes 0 Seasonal employees or other workers who attain full-time status for a short period of time.
- Assumes the workforce stays the same size (no contraction or growth of employee roster), and no change in the ratio of full time employees to part time employees.
- Assumes that the employer is not part of a controlled group.
- Assumes that if less than 95% of full time employees are offered coverage, then at east one FT employee purchases insurance on an exchange and is eligible to receive a tax credit. In general, FT employees who are not offered minimum essential coverage that is affordable and provides minimum value will be eligible to receive a tax credit for health insurance purchased on an exchange. However, there are several groups of employees who will not be eligible for a credit, including employees:
- Who do not actually purchase health coverage, or who purchase coverage other than through an exchange.
- Whose household income is less than 100% of the federal poverty level ($23,550 for a family of four in 2013) or exceeds 400% of the poverty level ($94,200 for a family of four in 2013).
- Who have coverage through a spouse that is affordable and provides minimum value.
- Assumes that the employer will not be subject to the “Subsection (b)” penalty. This is a $3,000 penalty (inflation-adjusted) for each employee who receives a tax credit for insurance purchased on an exchange because the health coverage offered by the employer (if any) fails to either be “affordable” or provide “minimum value.”
Estimates do not include amounts for the Transitional Reinsurance Program fee ($63 per covered life in 2014) or the Patient-Centered Outcomes Research Institute fee ($1 per covered life in 2013). These fees are generally paid by the insurer, and both are temporary.
Estimates do not include the cost of insurance for an employer who chooses to pay the $2,000 penalty but still offers insurance to a subset of the employee population.
Estimates are annualized, and do not take into consideration monthly fluctuations.
The estimate produced by ACA Estimator Lite, Kronos, and the client, is designed to facilitate a discussion around the value of employing a workforce management solution to assist the client in executing their labor strategy as it applies to ACA compliance and other facets of workforce management.
