Tier 2 penalty applies to not offering which type of plan?

AAM Phase 1 Test Introduction: Study with flashcards and multiple choice questions, each question has hints and explanations. Master the test and excel!

Multiple Choice

Tier 2 penalty applies to not offering which type of plan?

Tier 2 penalties hinge on offering coverage that is both affordable and of minimum value to employees who actually use the health insurance exchange and qualify for a premium tax credit. It isn’t about simply not offering a plan or not offering MEC in general. The penalty specifically targets situations where the employer’s plan fails the affordability/minimum value tests and an employee goes to the exchange to obtain a subsidy. In that scenario, penalties are tied to those employees who end up on the exchange, not to every employee or to not offering any plan at all. So the correct description is not offering affordable, minimum value plans—applies only to the FTEs who go to the exchange.

Tier 2 penalties hinge on offering coverage that is both affordable and of minimum value to employees who actually use the health insurance exchange and qualify for a premium tax credit. It isn’t about simply not offering a plan or not offering MEC in general. The penalty specifically targets situations where the employer’s plan fails the affordability/minimum value tests and an employee goes to the exchange to obtain a subsidy. In that scenario, penalties are tied to those employees who end up on the exchange, not to every employee or to not offering any plan at all. So the correct description is not offering affordable, minimum value plans—applies only to the FTEs who go to the exchange.

More practice questions