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Thursday, February 13, 2014

Changes to Employer Mandate Rules of ACA

On Monday, February 10, 2014, the Treasury Department issued final regulations relating to Shared Responsibility for Employers Regarding Health Coverage ("Employer Mandate").  These regulations further delay the penalties that would apply to large employers that fail to offer adequate health insurance coverage to full-time employees.

The Employer Mandate requirement of the Affordable Care Act was originally set to go into effect for all large employers (employers of 50 or more full-time equivalent employees) on January 1, 2014.  In July, 2013, the Obama Administration delayed implementation of significant elements of the Employer Mandate until January 1, 2015.  Monday's newly enacted regulations further delay implementation of the Employer Mandate for some employers and reduce the penalties for non-compliance for others.

The new regulations provide that large employers with 50 to 99 full-time equivalent (“FTE”) employees will not be liable for assessable payments for non-compliance with the Employer Mandate during 2015, although they will have to comply with the ACA’s employer reporting requirements during that year.  Employers with 100 or more FTE employees will still have to meet employer reporting requirements, but will be subject to reduced penalties for non-compliance.  The original penalty was set at $2,000 for each FTE after the first 30 employees, but the penalty for 2015 is now set at $2,000 per FTE after the first 80 until January 1, 2016, when the original penalties take effect.  

There were some other changes that will be of interest to local government employers, particularly those that relate to seasonal employees, who may now be considered a new employee each season.  

Post Authored by Don Anderson, Ancel Glink


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