Update on Health Care Reform

The final regulations were issued in mid-February with regards to the employer responsibility provisions (aka the large employer mandate or “pay or play” penalties) under the Affordable Care Act. As you may recall, in 2013 the “pay or play” penalties were delayed until January 1, 2015. These are the penalties that will be assessed on employers with 50 or more employees who do not offer minimum essential coverage to 95% of its full-time employees or who offer coverage that is not affordable or does not meet minimum value,.

Some of the changes in the final regulations are as follows:

• Employers that have between 50 and 99 full-time employees will have another year (until 2016) to comply with the regulations.
• Employers with 100 plus full-time employees will still have to comply by January 1, 2015.
• Employers with non-calendar year plans are subject to the mandate based on the start of their 2015 plan year rather than on January 1, 2015.
• Employers with 100 plus full-time employees have to comply in 2015, but for the first year they will only have to offer coverage to 70% or more of their full-time employees. The 95% requirement will not go into effect until 2016.
• The final regulations also provide clarification regarding whether employees of certain types or in certain occupations are considered full-time, including:
  • Educational employees: Teachers and other educational employees will not be treated as part-time for the year simply because their school is closed or operates on a limited schedule during the summer.
  • Seasonal employees: Those in positions for which the customary annual employment is six months or less generally will not be considered full-time employees.

As we continue to research and learn more about these final regulations, we will be providing information and assistance to our members.