Another Delay of the ACA Health Care Mandate for Some Employers

In yet another alteration to the Affordable Care Act, certain mid-size companies now have an additional year before the “play or pay” employer mandate kicks in. This surprising news became known when final regulations were issued by the U.S. Treasury Department on February 10. These regulations include important information for larger businesses as well. Find out if your company is affected and what your responsibilities are in relation to the changes.

 

Another Delay of the ACA Health Care Mandate for Some Employers

Employers that have 50 to 99 full-time employees or full-time equivalent employees (FTEs) now have a one-year reprieve, until 2016, to comply with the employer “play or pay” mandate. This delay is small — but significant — for those affected. It’s part of the 227-page final regulations regarding the employer mandate, which were released by the U.S. Treasury Department on February 10. (You can find the information in section 4980H of the Internal Revenue Code in the “shared responsibility” segment.)

Basics about “Play or Pay”

Under the Affordable Care Act, there is a shared responsibility mandate that imposes a penalty on a “large employer” if it does not offer “minimum essential” health insurance coverage or if one or more of its full-time employees obtains a premium tax credit to help purchase health coverage. The employer mandate applies to for-profit companies, not-for-profit organizations and government entities.

If your company falls into the 50-to-99 employee category that was given a reprieve to 2016, the delay may be good news, but your business is still required to take action, as described below.

Note: Employers having fewer than 50 FTEs were not required to comply with the play or pay mandate in the first place.

Here’s what you need to know, as well as possible responses.
Although employers in the 50-to-99 employee/FTE bracket won’t be subject to the mandate until 2016, they will be required to certify their eligibility for the delay. Also, employers with more than 100 FTEs are not permitted to trim their workforces simply to qualify for the mandate delay.

The IRS has left the door open to pushing back the mandate for larger employers as well. “As these limited transition rules take effect, we will consider whether it is necessary to further extend any of them beyond 2015,” the Treasury Department stated.

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