On Monday, February 10, 2014, the U.S. Department of Treasury released final regulations regarding the Employer Shared Responsibility requirements of the Patient Protection and Affordable Care Act ("Affordable Care Act"). Generally, the Employer Shared Responsibility provisions of the Affordable Care Act require large employers (defined as those with 50 or more full-time employees, including Full-Time Equivalents) to provide minimum essential coverage to 95% of full-time employees and their dependents or face being assessed an Employer Shared Responsibility Payment ("Payment" or "Penalty").
The final regulations provide multiple forms of transition relief for large employers, delaying certain parts of the Affordable Care Act until 2016. The transition relief (a.k.a. delays) described below apply to all of 2015 and, for non-calendar year plans, to any portion of the 2015 plan year that falls in 2016. This means that if the plan year starts July 1, 2015 and ends on June 30, 2016, the relief described below applies until July 1, 2016.
Employers with 50 - 99 full-time employees.
For plan year 2015, a Penalty will not be assessable for employers with 50 – 99 full-time employees. There are additional requirements to qualify for this relief, including that the employer may not reduce staff or hours, or eliminate or change health care benefits without a bona fide business reason for doing so.
Employers with 100 or more full-time employees.
Employers with 100 or more full-time employees must offer minimum essential health coverage to 70% (instead of 95%) of the employer’s full-time employees in plan year 2015 or face a Penalty.
The Treasury also partially revised calculation of the Penalty for plan year 2015. If a large employer fails to offer minimum essential health coverage to full-time employees, the employer may be assessed a monthly Penalty for each full-time employee after the first 80 employees (instead of the first 30).
Also, for plan year 2015, as long as the employer is taking action toward extending minimum essential coverage to dependents, no penalty will be assessed solely because of a failure to offer coverage to dependents.
For additional information regarding the final regulations, the Affordable Care Act, or any other Employee Benefits question, please contact the attorneys in the Employment and Labor Law section at Curtin & Heefner LLP.
DawnMarie Schulz is an Associate in Curtin & Heefner LLP’s Employment and Labor Law Section. Curtin & Heefner LLP is a regional law firm with offices in Morrisville and Doylestown, Pennsylvania and Lawrenceville, New Jersey. The firm engages in the practice of law in various areas including Adoption, Business, Municipal and Tax Free Financing, Real Estate, Employment & Public Sector, Environmental, Estate, Trusts & Tax, Commercial Services, and Litigation including Personal Injury.