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Health Care Reform Update: "Play or Pay" Delayed for Some
Regulations issued Monday, February 10, 2014, provided a one-year transition relief delay for most employers or groups with 50 to 99 full-time equivalent employees (FTEs), for purposes of the penalty provisions (up to $3,000 per employee per year) in the Affordable Care Act's employer shared responsibility provisions.
2016 Is New Effective Date
This deferral pushes the effective date of the penalty provisions for these employers to 2016. In order to qualify for this transition relief, these employers will need to certify that they didn't eliminate or reduce their employee health coverage that was in effect as of February 9, 2014, and that they didn't reduce their workforce or the hours of their employees as of February 9, 2014.
Reporting Requirements Remain
Note that the deferral does not defer the reporting requirements with respect to workers and coverage, which are still required for 2015. These reporting requirements, including the certification of eligibility of transition relief if applicable, will remain in effect for all employers with 50 or more FTEs so that the IRS can administer the premium tax credit. The following table provides a summary:
|
Full Time Equivalents |
Reporting on Workers and Coverage |
% of Full-Time
(30 Hrs.) Employees to be Covered in 2015 |
% of Full-Time (30 Hrs.) Employees to be Covered in 2016 |
Penalty Payment | |
0-49 |
N/A |
N/A |
N/A |
N/A | |
50-99 |
2015 |
N/A |
95% |
2016 | |
100+ |
2015 |
70% |
95% |
2015 |
FTE Counts Important
2014 now becomes important for managing FTE counts when the employer or group is close to 100 FTEs, and 2015 may become important for managing FTE counts when the employer or group is near 50 FTEs. Please note that the transitional relief is based on the employer's group health plan year and not the calendar year.
For additional information please contact your Eide Bailly service provider, visit our website or view the Department of Treasury Fact Sheet. |
