Tier 1 penalty is imposed for not offering MEC and equals which amount?

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Multiple Choice

Tier 1 penalty is imposed for not offering MEC and equals which amount?

Explanation:
Tier 1 penalty comes into play when an employer does not offer Minimum Essential Coverage to its full-time employees. The amount is a fixed per-FTE penalty, but there’s a 30-employee carve-out, meaning you subtract the first 30 full-time employees from the tally before applying the rate. The rate is $2,750 for each affected full-time employee beyond those first 30. In other words, the yearly penalty equals $2,750 times (the number of full-time employees who were not offered MEC beyond the first 30). For example, if there are 70 full-time employees and MEC wasn’t offered, the penalty would be $2,750 × (70 − 30) = $110,000. If the count after subtracting 30 is zero, there’s no Tier 1 penalty.

Tier 1 penalty comes into play when an employer does not offer Minimum Essential Coverage to its full-time employees. The amount is a fixed per-FTE penalty, but there’s a 30-employee carve-out, meaning you subtract the first 30 full-time employees from the tally before applying the rate. The rate is $2,750 for each affected full-time employee beyond those first 30. In other words, the yearly penalty equals $2,750 times (the number of full-time employees who were not offered MEC beyond the first 30). For example, if there are 70 full-time employees and MEC wasn’t offered, the penalty would be $2,750 × (70 − 30) = $110,000. If the count after subtracting 30 is zero, there’s no Tier 1 penalty.

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