Free Rider Penalty Calculator

 

Estimate Which Employees May Trigger a Free Rider Penalty

There are many open questions about the Free Rider Penalty, which will need to be answered by regulations. The interpretation on which the calculator is based represents our current understanding of the statutory language in the absence of regulatory guidance. Other interpretations may be equally valid. In other words, the calculator is not meant to provide all of the information an employer will need to comply with the Free Rider Penalty. To learn more, Click Here.

Calculator Information

Annual Premium

Enter the lowest amount an employee would have to pay for the year for employee-only major medical coverage.


Free Rider Penalty

p1FreeRider Before.

Free Choice Voucher

p1FreeChoiceA Before.

Free Rider Penalty / Free Choice Voucher

Bothp1 Before

Note that this only looks at the affordability aspect of the Free Rider Penalty – the employer will have to perform a separate calculation to determine whether the coverage is adequate.

American Fidelity Assurance Company does not provide tax or legal advice.

+ Expand
  • Information about Calculating the Impact
    Beginning in 2015, if an employer with 50 or more full-time equivalent employees either does not offer health plan coverage to full-time employees (30+ hours per week), or offers coverage that is inadequate (the actuarial value is less than 60%) or unaffordable (the employee must pay more than 9.5% of household income in order to participate) and an employee with household income of 400% of the Federal Poverty Level or less receives Federal premium tax credit to purchase Exchange coverage, the employer will owe a Free Rider Penalty.

    The impact of the Free Rider Penalty depends on the employee's cost of an employer’s health coverage compared to the employee’s income. The calculator will help you estimate whether you have employees for whom you may owe a Free Rider Penalty.

ESB-935(1011)

Next Steps

Sign up for Updates

VIP Notification Service

We provide a VIP Notification Service to keep you informed as new Health Care Reform rules are issued.
Click here to sign up.

Employer Toolbox

Health Care Reform checklists, worksheets, sample employee communications, and other solutions!
Learn More

Health Care Costs a Concern?

Check out these cost saving strategies.

Learn More

Quick Access

  • Your Account

    View your policies, download forms and check the status of your claims - all in one spot!

  • Claim & Flex Forms

    1Select the forms you need:

    Flex Benefits
    Accident Benefits
    Cancer Benefits
    Critical Illness
    Disability Benefits
    Hospital Indemnity
    Life Benefits
    Medical (GAP)
    HRA Benefits

    2Select your state & industry:

  • Check Claim Status
  • FAQs

    Please select a category or type your question in the box below.

    Keyword Search
    All FAQs