Number 1. Three transition rules apply in 2015. The first of these exempts employers with less than 100 full time equivalent employees (FTEs) in 2014 from the employer mandate in 2015. Any employee who works 120 hours or more in a month counts as one FTE. If they work 50 hours in a month they count as half an FTE. In 2015, the employer mandate applies to employers that have 50 or more FTEs in 2015.

Number 2. The second transition rule for 2015 is that employers subject to the employer mandate only need to offer minimum essential coverage (MEC) to 70 percent of their full-time employees. For this purpose, any employee who averages more than 30 hours per week during a month is considered a full time employee. In 2016 this 70 percent threshold goes up to 95 percent.

Number 3. The third transition rule for 2015 is that if an employer subject to the employer mandate fails to offer MEC to 70 percent or more of its full time employees, and even one of those employees gets subsidized coverage in a state health insurance exchange or in the federal health insurance exchange, the monthly penalty of $167 is imposed for each full-time employee you have in excess of 80. Therefore, if you have 200 full time employees and you fail to offer MEC to at least 140 of them (70 percent of 200) you could be subject to a penalty equal to $20,040 for each month that one of those employees receives subsidized coverage through the exchange (200 – 80 = 120 x $167= $20,040). In 2016, this penalty is imposed on each full time employee in excess of 30.

Number 4. If you are subject to the employer mandate, the coverage you offer your employees also needs to be “affordable” and provide “minimum value.” Coverage is “affordable” if the employee’s cost of employee-only coverage is less than 9.5 percent of the federal poverty line, or less than 9.5 percent of the employee’s rate of pay for the month. Coverage provides minimum value if the policy pays at least 60 percent of the cost of medical services for a standard population of claimants, as determined by actuarial calculations performed by your insurance company. Any “bronze” or above plan offered on the exchange satisfies minimum value.

Number 5. If you do not offer “affordable” “minimum value” coverage, the monthly penalty is $250 for each full-time employee who gets subsidized coverage in the exchange.

Number 6. You should keep meticulous records of each offer of coverage and of the house worked by each person to whom you do not offer coverage. This could become crucial evidence to prove you complied with the employer mandate if the IRS tires to assess a penalty against you for 2015.

Number 7. There are ways to minimize your exposure to the penalties, by designating certain Measurement and Stability period in accordance with the final employer mandate regulations. This can be very helpful in preventing employees to whom you not offer coverage from ever being considered full time employees for purposed of the employer mandate.

Number 8. The IRS will not begin assessing employer mandate penalties until well into 2016, after your employees have filed their tax returns. So if you do not take appropriate action now, (including by designating measurement and stability periods and keeping meticulous records of each offer of coverage and hours worked by those to whom you do not offer coverage) you might not realize you are accruing penalties for many months. Employer mandate penalties are not tax deductible.