Fine-Tuning the Impact of "Play or Pay" Strategies: Evaluating Compensation Adjustments.

One of the options available to employers under the Affordable Care Act is to drop health care coverage, pay a penalty and provide some form of additional compensation to employees. This article describes a process for evaluating this option, including considerations for establishing the amount of compensation to be provided, if any. It identifies a number of complexities and provides hypothetical examples of how employers might apply this option to employees with different salaries, ages and family statuses.