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Federal Labor & Employment Agencies Federal Labor & Employment Laws US State Minimum Wages Affordable Care Act Compliance HR Quick Reference Guides HR Forms & Documents Talent Acquisition
The Affordable Care Act (Obamacare)
The Road So Far (Prior to January 1, 2015)
The Road So Far (Prior to January 1, 2015)
Employer Pay or Play Mandate: Beginning January 1, 2014 employers with 50 or more employees (including FT/FT equivalent employees) that didn’t offer health coverage to their full-time employees and dependents that was affordable and provided minimum value were subject to penalties if any full-time employee received a government subsidy for health coverage through an Exchange. The sections of the health care reform law that contain the employer penalty requirements are known as the “shared responsibility” provisions.
· The penalty amount for not offering health coverage is up to $2,000 annually for each FTE, excluding the first 30 employees.
· Pursuant to the IRS regulations, an employer would not be liable for this penalty if it offered coverage to all but 5 percent (or, if greater, five) of its full-time employees and dependents.
Employers who offered health coverage, but whose employees received tax credits because the coverage was unaffordable or did not provide minimum value, were subject to a fine of up to $3,000 annually for each FTE who received a tax credit, with a maximum annual fine of $2,000 per FTE (excluding the first 30 employees). The IRS provided safe harbor guidance for employers on determining who is considered an FTE and must be offered coverage, how to measure a plan’s affordability, and how penalties will apply when there is a waiting period for coverage.
Grandfathered Plans: A grandfathered plan is one that was in existence when the health care reform became effective March 23, 2010. Making certain changes to your plan that go beyond permitted guidelines will trigger your plan is no longer being grandfathered.
Excessive Waiting Periods: A waiting period is the period of time that must pass before coverage for an employee or dependent who is otherwise eligible to enroll in the plan becomes effective. A health plan may not impose a waiting period that exceeds 90 days for plan years beginning on or after January 1, 2014. There are other conditions for eligibility that are permitted as long as they aren’t designed to avoid compliance with the 90-day waiting period.
Dependent Coverage: The ACA requires health plans that provide dependent coverage of children to make coverage available for adult children up to age 26 for plan years beginning on or after September 23, 2010. Grandfathered plans (For plan years prior to January 1, 2014) were not required to cover adult children under age 26 if they were eligible for other employer-sponsored group health coverage.
Limits on Cost-Sharing: Non-grandfathered health plans became subject to limits on cost-sharing or out-of-pocket costs for plans beginning on or after January 1, 2014. Out-of-pocket expenses were not to exceed the amount applicable to coverage related to HSAs. Deductibles were not to exceed $2,000 for single coverage or $4,000 for family coverage.
Pre-Existing Exclusions: The ACA initiated prohibiting health plans from imposing PCEs (pre-existing condition exclusions) on any enrollees. PCEs for enrollees under 19 years of age were eliminated by the ACA for plan years on or after Sept. 23, 2010.
Employer Notice to Employees of the New Health Insurance Marketplace: Under the Affordable Care Act, employers covered by the Fair Labor Standards Act (generally, those firms that have at least one employee and at least $500,000 in annual dollar volume of business), must provide notification to their employees about the new Health Insurance Marketplace; inform employees that they may be eligible for a premium tax credit if they purchase coverage through the Marketplace; and advise employees that if they employee purchase a plan through the Marketplace, they may lose the employer contribution (if any) to any health benefits plan offered by the employer. The Department of Labor has provided employers with two sample notices they may use to comply with this rule, one for employers who do not offer and another for employers who offer a health plan.
Summary of Benefits and Coverage (SBCs) Disclosure Rules: Employers are required to provide employees with a standard “Summary of Benefits and Coverage” form explaining what their plan covers and what it costs. The purpose of the SBC form is to help employees better understand and evaluate their health insurance options. Penalties may be imposed for non-compliance. For more information, visit https://www.federalregister.gov/articles/2013/09/09/2013-21791/information-reporting-by-applicable-large-employers-on-health-insurance-coverage-offered-under.
Medical Loss Ratio Rebates: Under ACA, insurance companies must spend at least 80% of premium dollars on medical care rather than administrative costs. Insurers who do not meet this ratio are required to provide rebates to their policyholders, which is typically an employer who provides a group health plan. Employers who receive these premium rebates must determine whether the rebates constitute plan assets. If treated as a plan asset, employers have discretion to determine a reasonable and fair allocation of the rebate. For more information on the federal tax treatment of Medical Loss Ratio rebates, refer to IRS's FAQs.
W-2 Reporting of Aggregate Health Care Costs: Beginning January 2013 (applicable to 2012 reporting), most employers must report the aggregate annual cost of employer-provided coverage for each employee on the Form W-2. The new W-2 reporting requirement is informational only and it does not require taxation on any health plan coverage. Reporting is required for most employer-sponsored health coverage, including group medical coverage. Small Employer Exception: For 2012 reporting and beyond until further guidance is issued, the W-2 reporting requirement does not apply to employers required to file fewer than 250 Form W-2s in the prior calendar year.
Limits on Flexible Spending Account Contributions: For plan years beginning on or after January 2013, the maximum amount an employee may elect to contribute to health care flexible spending arrangements (FSAs) for any year will be capped at $2500, subject to cost-of-living adjustments. Note that the limit only applies to elective employee contributions and does not extend to employer contributions.
Additional Medicare Withholding on Wages: Beginning January 1, 2013, the ACA increases the employee portion of the Medicare Part A Hospital Insurance (HI) withholdings by .9% (from 1.45% to 2.35%) on employees with incomes of over $200,000 for single filers and $250,000 for married joint filers. It is the employer’s obligation to withhold this additional tax, which applies only to wages in excess of these thresholds. The employer portion of the tax will remain unchanged at 1.45%.
New Medicare Assessment on Net Investment Income: Beginning January 1, 2013, a 3.8% tax will be assessed on net investment income such as taxable capital gains, dividends, rents, royalties, and interest for taxpayers with Modified Adjusted Gross Income (MAGI) over $200,000 for single filers and $250,000 for married joint filers. Common types of income that are not investment income are wages, unemployment compensation, operating income from a non-passive business, social security benefits, alimony, tax-exempt interest, and self-employment income.
Employee Categories: The final regulations provide clarifications – many of which are based on comments on the proposed regulations – regarding whether employees of certain types or in certain occupations are considered full-time, including:
· Volunteers: Hours contributed by bona fide volunteers for a government or tax-exempt entity, such as volunteer firefighters and emergency responders, will not cause them to be considered full-time employees.
· Educational employees: Teachers and other educational employees will not be treated as part-time for the year simply because their school is closed or operating on a limited schedule during the summer.
· Seasonal employees: Those in positions for which the customary annual employment is six months or less generally will not be considered full-time employees.
· Student work-study programs: Service performed by students under federal or state-sponsored work-study programs will not be counted in determining whether they are full-time employees.
· Adjunct faculty: Based on the comments we received, the final regulations provide as a general rule that, until further guidance is issued, employers of adjunct faculty are to use a method of crediting hours of service for those employees that is reasonable in the circumstances and consistent with the employer responsibility provisions. However, to accommodate the need for predictability and ease of administration and consistent with the request for a “bright line” approach suggested in a number of the comments, the final regulations expressly allow crediting an adjunct faculty member with 2 ¼ hours of service per week for each hour of teaching or classroom time as a reasonable method for this purpose.
How to Calculate Full-Time Equivalent Employees (FTEs): The number of full-time employees (equivalent) or FTEs is one of the critical factors that will determine which parts of the ACA apply to your business. Although it would seem to be a simple calculation, it is defined and applied in several ways. The ACA counts the average of the total number of all employees employed on business days during the preceding calendar year.
A couple quick notes about calculating FTEs:
· Employers can use measuring and reassessment to establish an employees’ full-time status for a future period (aka ‘stability period’). For employees who are determined to be full-time, the stability period must be at least six months, and no shorter than the measurement period. For employees determined not to be full-time, the stability period cannot be more than one month longer than the initial measurement period and must not exceed the remainder of the standard measurement period in which the initial measurement period ends. So, employers must re-evaluate employees who are considered not full-time after that amount of time. The employer has flexibility to choose the measurement period, but must be consistent.
· Once a new employee has been employed for a measurement period, the employer must assess whether they are a full-time employee.
A Simplified Approach
1. Using the most recent year, generate a list of all of your employees including full and part-time employees (use FT = 30+ hours per week and PT < 30 hours per week).
a. If you have seasonal employees (employees who typically are hired at the same time each year AND work fewer than 120 days per year), they can be excluded from the calculations.
2. Include the hours worked per week by the part-time employees.
3. Calculate employee average hours by using a previous 3 to 12 months’ period divided by the number of weeks in the same time period.
4. Count the number of employees who worked an average of 30+ hours per week for the year.
5. Add to this amount the number of hours worked per week by PT employees divided by 30.
Example: Jane has a business with 65 employees. She has:
· 35 employees who work an average of 40 hours per week
· 7 employees who work an average of 28 hours per week
· 12 employees who work an average of 24 hours per week
· 11 employees who work an average 20 hours per week
Total Full-Time Employees: (30+ hours): 35
Total Part-Time Employees: [(7 X 28) + (12 X 24) + (11 X 20)] / 30 = [196 + 288 + 220]/30 = 24.5
Total FTEs: 35 + 24 (always round down when calculating FTEs) = 59
Calculating for Applicable Large Employers (the total number of PT service hours worked in a month divided by 120)
1. Using the most recent year, generate a list of all of your employees including full and part-time employees (use to PT < 30 and FT 30+ calculation). Exclude seasonal employees (see above).
2. Divide the number of hours in a month for PT employees by 120.
3. Add the number of FT employees.
Example: Jane has a business with 52 employees. In November, she had:
· 35 employees who work an average of 40 hours per week
· 7 employees who work an average of 28 hours per week
· 6 employees who work an average of 24 hours per week
· 4 employees who work an average 20 hours per week
Total Full-Time Employees: (30+ hours): 35
Total Part-Time Employees: (420 hours per week X 4.29)/120 = 31,801.8/120 = 15.02
Total FTEs: 35 + 15 (always round down when calculating FTEs) = 50
· The penalty amount for not offering health coverage is up to $2,000 annually for each FTE, excluding the first 30 employees.
· Pursuant to the IRS regulations, an employer would not be liable for this penalty if it offered coverage to all but 5 percent (or, if greater, five) of its full-time employees and dependents.
Employers who offered health coverage, but whose employees received tax credits because the coverage was unaffordable or did not provide minimum value, were subject to a fine of up to $3,000 annually for each FTE who received a tax credit, with a maximum annual fine of $2,000 per FTE (excluding the first 30 employees). The IRS provided safe harbor guidance for employers on determining who is considered an FTE and must be offered coverage, how to measure a plan’s affordability, and how penalties will apply when there is a waiting period for coverage.
Grandfathered Plans: A grandfathered plan is one that was in existence when the health care reform became effective March 23, 2010. Making certain changes to your plan that go beyond permitted guidelines will trigger your plan is no longer being grandfathered.
Excessive Waiting Periods: A waiting period is the period of time that must pass before coverage for an employee or dependent who is otherwise eligible to enroll in the plan becomes effective. A health plan may not impose a waiting period that exceeds 90 days for plan years beginning on or after January 1, 2014. There are other conditions for eligibility that are permitted as long as they aren’t designed to avoid compliance with the 90-day waiting period.
Dependent Coverage: The ACA requires health plans that provide dependent coverage of children to make coverage available for adult children up to age 26 for plan years beginning on or after September 23, 2010. Grandfathered plans (For plan years prior to January 1, 2014) were not required to cover adult children under age 26 if they were eligible for other employer-sponsored group health coverage.
Limits on Cost-Sharing: Non-grandfathered health plans became subject to limits on cost-sharing or out-of-pocket costs for plans beginning on or after January 1, 2014. Out-of-pocket expenses were not to exceed the amount applicable to coverage related to HSAs. Deductibles were not to exceed $2,000 for single coverage or $4,000 for family coverage.
Pre-Existing Exclusions: The ACA initiated prohibiting health plans from imposing PCEs (pre-existing condition exclusions) on any enrollees. PCEs for enrollees under 19 years of age were eliminated by the ACA for plan years on or after Sept. 23, 2010.
Employer Notice to Employees of the New Health Insurance Marketplace: Under the Affordable Care Act, employers covered by the Fair Labor Standards Act (generally, those firms that have at least one employee and at least $500,000 in annual dollar volume of business), must provide notification to their employees about the new Health Insurance Marketplace; inform employees that they may be eligible for a premium tax credit if they purchase coverage through the Marketplace; and advise employees that if they employee purchase a plan through the Marketplace, they may lose the employer contribution (if any) to any health benefits plan offered by the employer. The Department of Labor has provided employers with two sample notices they may use to comply with this rule, one for employers who do not offer and another for employers who offer a health plan.
Summary of Benefits and Coverage (SBCs) Disclosure Rules: Employers are required to provide employees with a standard “Summary of Benefits and Coverage” form explaining what their plan covers and what it costs. The purpose of the SBC form is to help employees better understand and evaluate their health insurance options. Penalties may be imposed for non-compliance. For more information, visit https://www.federalregister.gov/articles/2013/09/09/2013-21791/information-reporting-by-applicable-large-employers-on-health-insurance-coverage-offered-under.
Medical Loss Ratio Rebates: Under ACA, insurance companies must spend at least 80% of premium dollars on medical care rather than administrative costs. Insurers who do not meet this ratio are required to provide rebates to their policyholders, which is typically an employer who provides a group health plan. Employers who receive these premium rebates must determine whether the rebates constitute plan assets. If treated as a plan asset, employers have discretion to determine a reasonable and fair allocation of the rebate. For more information on the federal tax treatment of Medical Loss Ratio rebates, refer to IRS's FAQs.
W-2 Reporting of Aggregate Health Care Costs: Beginning January 2013 (applicable to 2012 reporting), most employers must report the aggregate annual cost of employer-provided coverage for each employee on the Form W-2. The new W-2 reporting requirement is informational only and it does not require taxation on any health plan coverage. Reporting is required for most employer-sponsored health coverage, including group medical coverage. Small Employer Exception: For 2012 reporting and beyond until further guidance is issued, the W-2 reporting requirement does not apply to employers required to file fewer than 250 Form W-2s in the prior calendar year.
Limits on Flexible Spending Account Contributions: For plan years beginning on or after January 2013, the maximum amount an employee may elect to contribute to health care flexible spending arrangements (FSAs) for any year will be capped at $2500, subject to cost-of-living adjustments. Note that the limit only applies to elective employee contributions and does not extend to employer contributions.
Additional Medicare Withholding on Wages: Beginning January 1, 2013, the ACA increases the employee portion of the Medicare Part A Hospital Insurance (HI) withholdings by .9% (from 1.45% to 2.35%) on employees with incomes of over $200,000 for single filers and $250,000 for married joint filers. It is the employer’s obligation to withhold this additional tax, which applies only to wages in excess of these thresholds. The employer portion of the tax will remain unchanged at 1.45%.
New Medicare Assessment on Net Investment Income: Beginning January 1, 2013, a 3.8% tax will be assessed on net investment income such as taxable capital gains, dividends, rents, royalties, and interest for taxpayers with Modified Adjusted Gross Income (MAGI) over $200,000 for single filers and $250,000 for married joint filers. Common types of income that are not investment income are wages, unemployment compensation, operating income from a non-passive business, social security benefits, alimony, tax-exempt interest, and self-employment income.
Employee Categories: The final regulations provide clarifications – many of which are based on comments on the proposed regulations – regarding whether employees of certain types or in certain occupations are considered full-time, including:
· Volunteers: Hours contributed by bona fide volunteers for a government or tax-exempt entity, such as volunteer firefighters and emergency responders, will not cause them to be considered full-time employees.
· Educational employees: Teachers and other educational employees will not be treated as part-time for the year simply because their school is closed or operating on a limited schedule during the summer.
· Seasonal employees: Those in positions for which the customary annual employment is six months or less generally will not be considered full-time employees.
· Student work-study programs: Service performed by students under federal or state-sponsored work-study programs will not be counted in determining whether they are full-time employees.
· Adjunct faculty: Based on the comments we received, the final regulations provide as a general rule that, until further guidance is issued, employers of adjunct faculty are to use a method of crediting hours of service for those employees that is reasonable in the circumstances and consistent with the employer responsibility provisions. However, to accommodate the need for predictability and ease of administration and consistent with the request for a “bright line” approach suggested in a number of the comments, the final regulations expressly allow crediting an adjunct faculty member with 2 ¼ hours of service per week for each hour of teaching or classroom time as a reasonable method for this purpose.
How to Calculate Full-Time Equivalent Employees (FTEs): The number of full-time employees (equivalent) or FTEs is one of the critical factors that will determine which parts of the ACA apply to your business. Although it would seem to be a simple calculation, it is defined and applied in several ways. The ACA counts the average of the total number of all employees employed on business days during the preceding calendar year.
A couple quick notes about calculating FTEs:
· Employers can use measuring and reassessment to establish an employees’ full-time status for a future period (aka ‘stability period’). For employees who are determined to be full-time, the stability period must be at least six months, and no shorter than the measurement period. For employees determined not to be full-time, the stability period cannot be more than one month longer than the initial measurement period and must not exceed the remainder of the standard measurement period in which the initial measurement period ends. So, employers must re-evaluate employees who are considered not full-time after that amount of time. The employer has flexibility to choose the measurement period, but must be consistent.
· Once a new employee has been employed for a measurement period, the employer must assess whether they are a full-time employee.
A Simplified Approach
1. Using the most recent year, generate a list of all of your employees including full and part-time employees (use FT = 30+ hours per week and PT < 30 hours per week).
a. If you have seasonal employees (employees who typically are hired at the same time each year AND work fewer than 120 days per year), they can be excluded from the calculations.
2. Include the hours worked per week by the part-time employees.
3. Calculate employee average hours by using a previous 3 to 12 months’ period divided by the number of weeks in the same time period.
4. Count the number of employees who worked an average of 30+ hours per week for the year.
5. Add to this amount the number of hours worked per week by PT employees divided by 30.
Example: Jane has a business with 65 employees. She has:
· 35 employees who work an average of 40 hours per week
· 7 employees who work an average of 28 hours per week
· 12 employees who work an average of 24 hours per week
· 11 employees who work an average 20 hours per week
Total Full-Time Employees: (30+ hours): 35
Total Part-Time Employees: [(7 X 28) + (12 X 24) + (11 X 20)] / 30 = [196 + 288 + 220]/30 = 24.5
Total FTEs: 35 + 24 (always round down when calculating FTEs) = 59
Calculating for Applicable Large Employers (the total number of PT service hours worked in a month divided by 120)
1. Using the most recent year, generate a list of all of your employees including full and part-time employees (use to PT < 30 and FT 30+ calculation). Exclude seasonal employees (see above).
2. Divide the number of hours in a month for PT employees by 120.
3. Add the number of FT employees.
Example: Jane has a business with 52 employees. In November, she had:
· 35 employees who work an average of 40 hours per week
· 7 employees who work an average of 28 hours per week
· 6 employees who work an average of 24 hours per week
· 4 employees who work an average 20 hours per week
Total Full-Time Employees: (30+ hours): 35
Total Part-Time Employees: (420 hours per week X 4.29)/120 = 31,801.8/120 = 15.02
Total FTEs: 35 + 15 (always round down when calculating FTEs) = 50
The Road Ahead (January 1, 2015 and Beyond)
If your workforce has 100 or more FTEs in 2014…you will likely be subject to the Employer “Pay or Play” Mandate.
Employers opting to "play" (this means you will provide affordable, minimum value coverage):
· You will need to decide if you will need to use measurement periods to identify full-time employees and, if so,
(a) modify payroll systems to track, and
(b) make sure plan and insurance policies accurately reflect.
· You will need to determine if you will apply orientation, waiting period, or minimum hours of service before coverage begins.
· You will need to make sure your systems properly track breaks-in-service.
· You will need to decide whether to exclude certain groups through company restructuring, exclude Medicaid-eligible, or enforce part-time hour’s limits.
· If you use staffing company/PEO/leasing, you will need to decide who will provide health coverage.
· You will need to review your plan(s) to confirm that they satisfy the minimum essential coverage rules.
· You will need to determine what method you will use to calculate whether your plan coverage is “affordable” (is the employee only premium less than 9.5% of household income?).
· You will need to decide what changes you need/want to make to dependent and spousal coverage, based on coverage requirements and affordability requirements.
Employer Reporting: If you are subject to the Mandate, make sure you will file all required reports and include required information on Forms W-2 with the IRS.
Provisions to Assist Businesses to Comply in 2015
· To provide a gradual phase-in of the employer responsibility provisions and assist employers in complying and providing coverage, the final rules provide transition relief for 2015.
· 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 if the employer provides an appropriate certification described in the rules.
· 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, rather than 95 percent which will begin in 2016.
Employer Shared Responsibility Provisions
· Beginning in 2015, those employers with 100 or more full-time or full-time equivalent employees who do not offer affordable health insurance that provides minimum value to their full-time employees (and dependents) may be required to pay an assessment if at least one of their full-time employees is certified to receive a Premium Tax Credit in the individual Health Insurance Marketplace.
· Under these rules, a full-time employee is one who is employed an average of at least 30 hours per week.
· For employers with 50-99 full time/full-time equivalent employees, these rules will not apply until 2016 provided employers of this size meet certain certification requirements.
· In February 2014, the U.S. Department of Treasury issued the Final Rules for Employer Shared Responsibility.
Information Reporting on Health Coverage by Employers
· Beginning in 2015, the Affordable Care Act provides for information reporting by employers with 50 or more full-time or full-time equivalent employees regarding the health coverage they offer to their full-time employees (known as Section 6056 rules).
· New information reporting by issuers, self-insuring employers, and other parties that provide health coverage also take effect in 2015 (Section 6055 rules).
· The first of these reports must be filed in 2016.
Full-Time Employee Status Determinations
· Like the December 2012 proposed regulations, the final rules allow employers to use an optional look-back measurement method to make it easier to determine whether employees with varying hours and seasonal employees are full-time.
· Responding to comments, the final regulations also clarify the application of this method and the alternative monthly method of determining full-time status.
Affordability Safe Harbors
· Like the proposed regulations, the final rules provide safe harbors that make it easy for employers to determine whether the coverage they offer is affordable to employees.
· These safe harbors permit employers to use the wages they pay, their employees’ hourly rates, or the federal poverty level in determining w whether employer coverage is affordable under the ACA.
Employers opting to "play" (this means you will provide affordable, minimum value coverage):
· You will need to decide if you will need to use measurement periods to identify full-time employees and, if so,
(a) modify payroll systems to track, and
(b) make sure plan and insurance policies accurately reflect.
· You will need to determine if you will apply orientation, waiting period, or minimum hours of service before coverage begins.
· You will need to make sure your systems properly track breaks-in-service.
· You will need to decide whether to exclude certain groups through company restructuring, exclude Medicaid-eligible, or enforce part-time hour’s limits.
· If you use staffing company/PEO/leasing, you will need to decide who will provide health coverage.
· You will need to review your plan(s) to confirm that they satisfy the minimum essential coverage rules.
· You will need to determine what method you will use to calculate whether your plan coverage is “affordable” (is the employee only premium less than 9.5% of household income?).
· You will need to decide what changes you need/want to make to dependent and spousal coverage, based on coverage requirements and affordability requirements.
Employer Reporting: If you are subject to the Mandate, make sure you will file all required reports and include required information on Forms W-2 with the IRS.
Provisions to Assist Businesses to Comply in 2015
· To provide a gradual phase-in of the employer responsibility provisions and assist employers in complying and providing coverage, the final rules provide transition relief for 2015.
· 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 if the employer provides an appropriate certification described in the rules.
· 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, rather than 95 percent which will begin in 2016.
Employer Shared Responsibility Provisions
· Beginning in 2015, those employers with 100 or more full-time or full-time equivalent employees who do not offer affordable health insurance that provides minimum value to their full-time employees (and dependents) may be required to pay an assessment if at least one of their full-time employees is certified to receive a Premium Tax Credit in the individual Health Insurance Marketplace.
· Under these rules, a full-time employee is one who is employed an average of at least 30 hours per week.
· For employers with 50-99 full time/full-time equivalent employees, these rules will not apply until 2016 provided employers of this size meet certain certification requirements.
· In February 2014, the U.S. Department of Treasury issued the Final Rules for Employer Shared Responsibility.
Information Reporting on Health Coverage by Employers
· Beginning in 2015, the Affordable Care Act provides for information reporting by employers with 50 or more full-time or full-time equivalent employees regarding the health coverage they offer to their full-time employees (known as Section 6056 rules).
· New information reporting by issuers, self-insuring employers, and other parties that provide health coverage also take effect in 2015 (Section 6055 rules).
· The first of these reports must be filed in 2016.
Full-Time Employee Status Determinations
· Like the December 2012 proposed regulations, the final rules allow employers to use an optional look-back measurement method to make it easier to determine whether employees with varying hours and seasonal employees are full-time.
· Responding to comments, the final regulations also clarify the application of this method and the alternative monthly method of determining full-time status.
Affordability Safe Harbors
· Like the proposed regulations, the final rules provide safe harbors that make it easy for employers to determine whether the coverage they offer is affordable to employees.
· These safe harbors permit employers to use the wages they pay, their employees’ hourly rates, or the federal poverty level in determining w whether employer coverage is affordable under the ACA.