Affordable Care Act Employer Mandate Delayed – Redefined

Employers with 50-99 Full-Time Workers – Delayed Coverage Offering Until 2016

Employers with 100 or More Full-Time Workers – Mandate Changes From Offering Coverage to 95% of Employees to 70%

On February 10, 2014, the IRS and Treasury Department issued final regulations that impact enforcement of the Employer Mandate. Two changes were announced – one impacting employers with 50-99 employees, and the other with greater than 100 employees.

Employers with 50-99 full-time workers workers will be given until 2016 to offer health insurance coverage to employees before they risk a federal penalty for not complying.

Employers with 100 or more full-time employees will be subject to the mandate starting in 2015, although coverage to eligible full-time employees is reduced from 95% to 70% in 2015 to avoid the Type A penalty. Employers will need to offer coverage to at least 95% of eligible employees in 2016 to avoid the Type A penalty.

Clarification was provided for employers with a plan year which doesn’t start on January 1. The mandate was previously unclear when the penalty would apply – on January 1, 2015 or on the first day of the plan year (if not January 1). For employers with 100 or more full-time employees, the mandate will apply on the first day of their plan year in 2015 (meaning employers with non-calendar year plans will not have to provide coverage to full-time employees on January 1, 2015; coverage must be provided as of the first day of the plan year starting in 2015).

One additional clarification was provided regarding the length of the measurement period. In 2014, a shortened transition measurement period of six months is permitted.

The full-time employee definition remains at 30 hours or more per week. The definition of dependent has been revised to exclude stepchildren and foster children, and continues to exclude spouses.

More information can be found at:
http://www.treasury.gov/press-center/press-releases/Pages/jl2290.aspx/
http://www.treasury.gov/press-center/press-releases/Documents/Fact%20Sheet%20021014.pdf
http://www.ofr.gov/OFRUpload/OFRData/2014-03082_PI.pdf