Views & Analysis from our Experts

ACA Employer Mandate Delay: More Changed Than Just the Dates

The “employer mandate” has been further delayed, following the first delay in July 2013. Much more has changed than just the dates, however.

Here are the dates
The Treasury Department delayed the effective date of the employer shared responsibility provisions and the reporting requirements under the ACA that apply to large employers from January 1, 2014, to January 1, 2015.

Here’s the big news
The Treasury Department’s final regulations implementing the employer shared responsibility provisions contain very favorable provisions to help employers transition to the full implementation of the employer mandate provisions.

Three major transitions rules offer welcome news to large employers:

  1. The employer shared responsibility provisions, effective January 1, 2015, will only apply to employers with 100 or more full-time/full-time equivalent employees (FT/FTEs). Employers with between 50-99 FT/FTEs will not be subject to the employer shared responsibility payments until January 1, 2016.
  2. For employers subject to the employer shared responsibility provisions effective January 1, 2015, the health plan must only cover 70% of the FT employees for 2015. The original coverage percentage of 95% will not apply until January 1, 2016.
  3. The final regulations extend the limited transitional guidance issued in 2013 that applied only to 2014 to the delayed January 1, 2015, effective date. This means that:
  • An employer can determine for 2015 if it has at least 100 FT/FTEs in the previous year by reference to any period of at least six consecutive months, instead of a full year
  • An employer with a fiscal-year health plan will not be subject to the employer shared responsibility payment provisions until the beginning of the plan year that begins in 2015

We will provide further information related to the final “play or pay” regulations in the near future.

The delay isn’t forever—Take the time to prepare
The key immediate take-away is that employers with less than 100 FT/FTEs have an additional year to bring their health plans into compliance with the ACA. Those employers with 100 or more FT/FTEs must use the time remaining in 2014 to get ready for the employer shared responsibility provisions that will be effective January 1, 2015.

Here is the Treasury Department fact sheet. For questions, contact Roger Prince or Bill Enck, BerryDunn’s Employee Benefits consultants.


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