One thing employers need to keep in mind as they ponder the addition of a vaccine mandate on employees and the implementation surcharges/penalties against employees who refuse the jab is that additional penalties assessed against the employee could push the employer's plan over PPACA's affordability limits. This would trigger a $4,060 fine back against the employer for each impacted employee. Kyle Scott, writing over at Benefits Pro summarizes this nicely here:
The Affordable Care Act (ACA) requires Applicable Large Employers (ALEs) to offer affordable health care benefits to eligible employees or pay a penalty. Within the ACA law lie very specific rules governing the design of wellness programs, especially regarding incentives and penalties (premium surcharges). ...
In 2021, affordability is achieved when an employee’s cost for health insurance benefits is no more than 9.83% of that employee’s household income. This percent is adjusted each year and safe harbors apply. ...If the cost including the surcharge renders the plan as unaffordable, and the employee goes to the exchange and receives a premium tax credit, the employer may be subject to Penalty B. The $4,060 penalty per year can be multiplied by the total number of full-time employees who did not have an offer of affordable coverage and who also receive a premium tax credit. ...While there is an exception for tobacco, there’s nothing currently in the ACA rules that similarly applies to a surcharge or penalty for non-COVID-19 vaccinated employees. ...
