Obamacare Midsize Employer Mandate Delayed Till 2016.
For small businesses employing 50-99 the Treasury Dept is not requiring compliance of the Employer Mandate until 2016. Companies with 100 workers or more could avoid penalties in 2015 if they showed they were offering coverage to at least 70 percent of their full-time workers, the Treasury said.
The large group employer mandate had been originally delayed until 2015 in July 2013 see- Obamacare Employer Mandate Delayed, More Guidance. Employers with the equivalent of 50 full-time workers or more had to originally offer coverage or pay a penalty starting at $2,000 per worker beginning in 2014.
Employers with 100 or more full-time employers will have to comply with the Internal Revenue Code Section 4980H “play or pay” provision Jan. 1, 2015. Companies with 100 workers or more could avoid penalties in 2015 if they showed they were offering coverage to at least 70 percent of their full-time workers, the Treasury said.
Under the new rules, companies would be allowed during the phasing-in year to offer coverage specifically to a subset of employees, such as those working 35 hours or more a week, the Treasury said.
Treasury also set new rules for how the requirement would apply to workers such as volunteers and seasonal employees, saying that employers wouldn’t be penalized for failing to offer those people coverage, regardless of the number of hours they were working. Teachers, however, wouldn’t be considered part-time workers even if they were away over the summer, and adjunct faculty would have a special arrangement for how their classroom hours should be counted.
The penalty the employer pays would be based on the number of full-time workers that the employer employs. For purposes of calculating the penalty, the employer would not have to include part-time and seasonal workers in the calculations. Under PPACA, only workers who are not offered group health coverage are eligible to apply for exchange coverage.
The coverage must encompass a core set of benefits and be affordable – which the law defines as premiums costing no more than 9.5 percent of an employee’s income – and the employer must pay for the equivalent of 60 percent of the cost of coverage for workers but not their dependents.
As reported in Washington Post: “Administration officials said that organizations with a large number of volunteer employees – such as firefighters and first responders – would not have to provide coverage, along with those hiring seasonal employers who work six months or less in a given year. Teachers will not be considered part-time just because they do not work for three months during the summer, officials added, while the status of adjunct faculty will be calculated on a formula where they would receive credit for 2¼ hours of service per week for each hour they spent teaching or in the classroom.”
Many Employers are asking for flexibilities of defining FT as higher than 30 hours. The law has already had unintended consequences with shift in employment hours especially in industries such as dining, entertainment, services and construction.
Clink on the link for a copy of the regulations: https://s3.amazonaws.com/public-inspection.federalregister.gov/2014-03082.pdf
Other transitional relief contained in the regulations include:
- For employers with between 50 and 99 employees, the employer mandate is delayed until 2016. Note that an employer must provide a certification to take advantage of this relief.
- Employees in positions for which the customary annual employment is six months or less generally will be considered seasonal employees and not full-time employees.
- When employers are first subject to the employer mandate, they can determine whether they had at least 100 full-time employees in the previous year by referencing a period of six consecutive months, rather than an entire year.
- For purposes of determining coverage in 2015 only, employers may use a measurement period (the period used to determine whether a variable-hour employee is a full-time employee) of six months, with respect to a stability period (the period following the measurement period, during which the variable-hour employee must be offered coverage) of up to 12 months.
- Employers with non-calendar year plans must comply with the employer mandate at the start of their 2015 plan year, rather than on January 1, 2015.