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On February 10th, an additional delay to the employer mandate was announced. Businesses with 50 to fewer than 100 “full time equivalent” (FTE) employees will not be required to cover their workers until 2016 if an appropriate certification is provided. In addition, employers with 100 or more FTEs will receive extra “transition” time to get their plans into compliance.

For employers with 50 to fewer than 100 FTEs in 2014, there are certain eligibility conditions for transition relief in 2015:

  • During the period from 2/9/14 to 12/31/14, the employer does not reduce
    the size of its workforce or the overall hours of service of its employees
    (unless for a bona fide business reason).
  • Health coverage offered as of 2/9/14 is not eliminated or materially reduced.
  • The employer certifies that it meets the eligibility requirements for
    transition relief outlined above. This certification form is anticipated to be part of the forthcoming final employer reporting requirements under
    code Section 6056.

For employers with 100 or more FTEs, regulations state that they will have to offer minimum value, affordable coverage to only 70% of their full-time employees in 2015 to avoid the $2,000 per employee penalty, a decrease over the 95% requirement initially contained in the law.

The final regulations also extend some of the transition rules previously communicated:

  • Employers can use a period of 6 months to determine whether they had at least 100 FTE employees in the 2014 calendar year.
  • Non-calendar year plans will be able to begin compliance with the employer responsibility mandate at the start of their plan year in 2015.
  • Policies that do not currently include coverage for dependent children will not be required to offer coverage to dependent children in 2015 as long as they are “taking steps to arrange for such coverage to begin in 2016”.
  • In 2014 preparing for 2015, plans may use a measurement period of 6
    months to determine eligibility for variable hour workers even if they are
    using a stability period of 12 months.

Finally, the safe harbor for determining “affordability” was confirmed. These safe harbors permit employers to use the wages they pay (box 1 of the employee’s W2 form), their employee’s hourly rates or the federal poverty level in determining whether coverage is affordable under the ACA.

Give TCU Insurance a call for all of your Indiana business insurance needs at 800.772.8043.

To view the FAQ released by the IRS, you can visit:

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