This week, the Internal Revenue Service issued final regulations under the Patient Protection and Affordable Care Act which, among many other things, provide that employers with 50 to 99 full-time employees will not be subject to the Employer Shared Responsibility provisions (a/k/a the “Employer Mandate”) until 2016. Therefore, they will not be penalized for failure to provide employer health coverage until 2016. Employers which have reduced their workforces from 100 or more full-time employees will need to certify that they did so for bona fide business reasons, and not in order to qualify for this transition relief.
Larger businesses (100 or more full-time employees) are still subject to the employer mandate for 2015; however, they now only need to cover 70% (previously 95%) of full-time workers in 2015.
This is the second significant delay of the ACA’s employer mandate, which will eventually require employers with 50 or more full-time employees to provide coverage or pay a penalty. Political debate aside, this is a beneficial reprieve for many employers subject to the mandate.
We continue to follow the law and discuss the impact of these requirements and changes with our clients. For now, stay tuned.