On February 10, 2014, the Treasury Department and IRS issued new regulations regarding the rollout of the employer mandate under the Affordable Care Act. The new regulations delay the mandate for certain mid-sized employers (50-99 employees) and lessen its impact during 2015 for large employers (100+ employees).
The new regulations provide:
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Mid-sized employers (50-99 full-time employees including “full-time equivalent” employees during 2014) will not have to offer affordable coverage to their employees until 2016 – a year later than expected – provided the employer: (i) meets certain requirements during 2014 regarding maintaining the size of its workforce and (ii) meets certain requirements from February 9, 2014 through December 31, 2015 regarding maintaining its level of health benefits offered on February 9, 2014. Also, an employer taking advantage of this rule for 2015 will have to provide a certification to the IRS of compliance with these requirements.
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Large employers (100 or more full-time employees including “full-time equivalent” employees) will only be required to offer coverage to 70% of their full-time employees in 2015– lower than the 95% required previously. However, to the extent a full-time employee is not offered affordable coverage in 2015 under this rule and instead purchases federally subsidized health insurance on the health insurance exchange, the large employer may still be subject to a penalty of $250 per month for each such employee during 2015. In 2016 and beyond, the percentage that must be offered coverage rises to 95%.
This announcement does not affect the requirement that individuals obtain insurance coverage this year.
