Employer Mandates Updated as of February 12, 2014

Still wondering what the Affordable Care Act (ACA) regulations are? After multiple delays the U.S. Department of the Treasury and the Internal Revenue Service (IRS) has finally issued regulations for the implementation of the employer responsibility provisions. These final regulations should provide transition relief to employers with 50+ employees.

As the employer mandates does not apply to employers with less than 50 employees, small businesses are not required to provide coverage or to fill out any forms under the Affordable Care Act. For those employers that have more than 50 full-time employees, the final regulations will provide the some transition relief.

Employers with more than 100 employees will need to offer coverage to 70% of their full-time employees in 2015 and will need to provide coverage to 95% in 2016 and each year after.

Employers with 50 to 90 employees will not have to comply with the provisions set forth in the Affordable Care Act until 2016. In order to be eligible for this transition relief, employers must certify that they meet the following requirements:

1. Workforce Size: Employer must employ at least 50 but not more than 100 full-time (or full-time equivalent) employees on business days throughout 2014. The number of qualifying employees is determined by applicable rules in the final regulation for determining status an applicable large employer.
2. Maintaining Employees and Hours of Service: The employer may not reduce the size of their workforce nor the overall hours of service of its employees from February 9, 2014 to December 31, 2014. This condition can be met if the business is able to provide a bona fide business reason for the reduction.
3. Maintaining Previously Offered Coverage:  From February 9, 2014 to December 31, 2015 (or the last day of the 2015 plan year for those employers with non-calendar-year plans) an employer may not eliminate or reduce the health coverage, in any, that was offered as of February 9, 2014. Any changes in benefits to employee-only coverage must continue to provide minimum value and the employer may not narrow or reduce the classes of employees (or employee’s dependents) to whom coverage is ordered.   The regulations of the Affordable Care Act are highly technical. Employers who are seeking to take advantage of transition relief should consult with a licensed tax professional.