Now some employers have more time before the employer mandate fully takes effect. The U.S. Treasury Department has issued final regulations for implementing the employer mandate that is part of the Affordable Care Act.
The final rules give transition relief for 2015 to provide a gradual phase-in of the employer responsibility provisions and assist employers in complying and providing coverage.
While the employer responsibility provisions will generally apply starting in 2015, they will not apply until 2016 to employers with at least 50, but fewer than 100 full-time employees. This was originally to apply to all employers with at least 50 full-time employees for 2014.
However, employers that are subject to the employer responsibility provisions in 2015 must offer coverage to at least 70 percent of full-time employees as one of the conditions for avoiding an assessable payment. In 2016, they will have to provide coverage for 95 percent of employees.
Employers need to meet the following qualifications in order to be eligible for the relief:
(a) Limited workforce size.
The employer must employ on average at least 50 full-time employees (including full time equivalents (FTEs)), but fewer than 100 full-time employees (including FTEs) on business days during 2014. For this purpose, the determination of the number of full-time employees (including FTEs) is made in accordance with the otherwise applicable rules for determining status as an applicable large employer.
(b) Maintenance of workforce and aggregate hours of service.
During the period beginning on February 9, 2014, and ending on December 31, 2014, the employer does not reduce the size of its workforce or the overall hours of service of its employees in order to satisfy the workforce size condition set forth at (a) above. A reduction in workforce size or overall hours of service for bona fide business reasons will not be considered to have been made in order to satisfy the workforce size condition. For example, reductions of workforce size or overall hours of service because of business activity such as the sale of a division, changes in the economic marketplace in which the employer operates, terminations of employment for poor performance, or other similar changes unrelated to eligibility for this transition relief are for bona fide business reasons and will not affect eligibility for that transition relief.
(c) Maintenance of previously offered health coverage.
The employer does not eliminate or materially reduce the health coverage, if any, it offered as of February 9, 2014. The new rules provide exceptions to this rule for certain small reductions if the employer does not alter the terms of its group health plans to narrow or reduce the class or classes of employees (or the employees' dependents) to whom coverage under those plans was offered on February 9, 2014.
(d) Certification of eligibility for transition relief.
The employer certifies on a prescribed form that it meets the eligibility requirements set forth in paragraphs (a) through (c) above.
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