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Final Employer Shared Responsibility Regulations Issued

In an update to the Affordable Care Act (ACA), applicable large employers that have fewer than 100 full-time employees will have an additional year, until 2016, to comply with the pay or play rules. On February 10, 2014, the U.S. Treasury Department released final regulations implementing the employer shared responsibility provisions of the ACA. These regulations took effect on February 12, 2014.

The Affordable Care Act (ACA) will impose a penalty on applicable large group employers (ALEs) that do not offer minimum essential coverage to full-time employees and their dependents. Large employers that offer this coverage may still be liable for a penalty if the coverage is affordable or does not provide minimum value. The ACA's employer mandate provision is often referred to as the "employer shared responsibility" or "pay or play" rules.

According to the Departments, approximately 96 percent of employers are small businesses that have fewer than 50 workers and are exempt from the employer responsibility provisions. The employer shared responsibility provisions apply only to applicable large employers that have 50 or more full-time employees.

The final rules will delay implementation for medium-sized employees that are covered by the employer mandate. ALEs that have fewer than 100 full-time employees will have an additional year, until 2016, to comply with the employer shared responsibility rules.

Employer shared responsibility will now generally apply to:

  • Employers with 100 or more full-time employees starting in 2015; and
  • Employers with 50-99 full-time employees starting in 2016.

Additional key points within the updates include:

  • Certain transition relief is extended, including relief for non-calendar year plans;
  • The requirement to offer coverage to 95 percent of full-time employees will be phased in over two years; and
  • Full-time status is clarified for certain groups.

Relevant stipulations are provided by Alltrust in the Health Care Reform Bulletin and include:

  • What it takes to qualify for the employer shared responsibility delay;
  • Provisions for businesses that offer coverage to most, but not all, employees in 2015;
  • How to calculate the penalty for failing to offer coverage;
  • Various employee categories;
  • Full-time employee status determinations;
  • Affordability safe harbors; and
  • Final rules simplifying employer information reporting.

For more information, contact Alltrust's Compliance and Healthcare Reform knowledge experts. To read the full article, click here.