The health reform law does not require employers to provide health benefits. However, it does impose penalties in some cases on larger employers (those with 50 or more workers) that do not provide insurance to their workers or that provide coverage that is unaffordable.

Larger employers that do not provide coverage will be assessed a penalty beginning in 2014 if any one of their workers receives a tax credit when buying insurance on their own in a health insurance Exchange. Workers with income up to 400% of the poverty level are eligible for tax credits. The employer penalty is equal to $2,000 multiplied by the number of workers in the business in excess of 30 workers (with the penalty amount increasing over time).

In some instances, larger employers that offer coverage could be subject to penalties as well. If the coverage does not have an actuarial value of at least 60% -- meaning that on average it covers at least 60% of the cost of covered services for a typical population -- or the premium for the coverage would exceed 9.5% of a worker's income, then the worker can obtain coverage in an Exchange and be eligible for a tax credit. For each worker receiving a tax credit, the employer will pay a penalty of $3,000 up to a maximum of $2,000 times the number of workers in excess of 30 workers.

Employers