The ACA employer mandate required that employers with 50 or more employ- ees who worked full-time (defined as at least 30 hours a week) must offer to buy their employees single coverage for an affordable and ACA-qualified health plan. An affordable plan was defined as one in which the employee did not have to spend more than 2.5 to 9.66 percent of her wages (depending on income) on the premium. Qualified ACA health plans consisted of four metal plans (Bronze, Silver, Gold, and Platinum). An employer failing to offer employees an affordable and qualified plan had to pay a $2,000 tax per employee.
The uninsured employee did not have to accept the employer’s offer. If the employee rejected the employer’s offer, the employer was no longer subject to the employer mandate tax.
Many uninsured employees believed the value of the minimum-qualified Bronze plan, with its large out-of-pocket payments, was not worth even the reduced amount they would have had to pay for it. The Bronze plan included a $6,000 deductible and cost-sharing expenses, and it paid about 60 percent of medical costs. In 2017, the average annual premium for a Bronze plan was $3,200, for which the employee was liable for only 2.5 to 9.66 percent of his income. If the employee wanted to buy a separate health plan for his family, in addition to having to pay the full $3,200 annual premium (plus child cost), the plan also included a $6,000 deductible. Many uninsured, low-income employees declined their employer’s offer because they would have had to pay the additional premium of $3,200 plus two deductibles ($12,000) before they could receive any insurance benefits.