Affordable Care Act Employer Mandate Delayed

The Obama administration announced on Monday, February 10, 2014, further delays to the ACA’s employer mandate. The Treasury Department issued final regulations that delay the implementation of employer shared-responsibility requirements under the Act for some employers until 2016. The administration cites as the reason for the delay the need for a gradual phase-in of the law’s requirements to ease the burden on employers.

In general, the final regulations state that:

The Employer Responsibility Provision Will Apply To Larger Firms With 100 Or More Full-Time Employees Starting In 2015 And Employers With 50 Or More Full-Time Employees Starting In 2016. Essentially, Medium-Sized Employers Will Receive An Extra Year—Until 2016—Before They Must Offer Health Insurance To Their Full-Time Workers. Firms With At Least 100 Full-Time Employees Must Begin Offering This Coverage In 2015.
Large Employers Need To Offer Coverage To 70% Of Their Full-Time Employees In 2015, And 95% In 2016 And Beyond.
The regulations impact employers of different sizes in different ways. Here are the basic rules broken out by employer size:

Small businesses with fewer than 50 full-time equivalent (FTE) employees (about 95% of all employers): Under the Affordable Care Act, companies that have fewer than 50 FTE employees are not required to provide coverage in 2015, or in any year thereafter.

Employers with 50 – 99 FTE employees (about 2% of employers): Companies with 50 – 99 FTE employees will not face penalties for failing to offer coverage to full-time employees and their dependents up to age 26 until the first plan year beginning on or after January 1, 2016. In addition, these employers will need to certify that they are not reducing the size of their workforce to stay below the 100-employee threshold.

Large employers with 100 or more FTE employees (about 2% of employers): The overwhelming majority of large employers with 100 or more employees already offer quality coverage. The final regulations require large employers to offer coverage to 70% of their full-time employees in 2015, and 95% of their full-time employees in 2016 and beyond. Employers in this category that fail to meet these requirements will face penalties.

The rules released on February 10 also further clarify certain provisions related to FTE employee status, affordability calculations, employer reporting requirements and more.

Watkins Insurance Group specializes in employee benefits and can help your business find the right type of plan that will fit the needs of your employees. We can also answer any questions you may have on the new healthcare laws. Give us a call today!

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