Example 2

John’s engineering company, Micro Widgets, has 51 full-time employees. John provides his employees one health plan, a health maintenance organization (HMO). The actuarial value of the HMO is 50%, meaning that the plan pays half the cost of covered benefits. Micro Widgets’ plan is below the health care law’s 60% actuarial value threshold, and fails to meet the minimum value. What will the penalty be?