Employer Mandate Delayed Until 2016
Under pressure from business groups, the Obama administration has delayed the employer shared-responsibility mandate for the second time. In July of last year, the administration delayed the employer mandate until 1/1/2015 for all employers who otherwise would have had to comply on 1/1/2014. The mandate applies to all employers with 50 or more full-time equivalent (FTE) employees. Final regulations were issued this past Wednesday, and while they do not change the requirement that employers offer coverage, they do provide relief until 2016 for employers with between 50 and 99 full-time equivalent (FTE)
employees. Employers with 100 or more will still have to comply beginning 1/1/2015.
Employers with between 50 and 99 FTE employees in 2014 will not...
employees. Employers with 100 or more will still have to comply beginning 1/1/2015.
Employers with between 50 and 99 FTE employees in 2014 will not...
...be subject to the shared-responsibility mandate until 2016, provided certain requirements are met. Employers with fewer than 100 workers will be required to certify (on a form that has yet to be provided) that they haven’t terminated employees in order to get below the 100-worker threshold and they will also have to certify that they will continue to provide the same level of coverage currently provided and maintain the same employer contribution to single coverage.
Employers with 100 or more employees remain subject to the mandate effective January 1, 2015. The regulations maintain that minimum essential coverage must be offered to 95% of the employer’s full-time employees, however, the regulations have reduced that requirement to 70% through the end of 2015. If an employer does not provide minimum essential coverage to at least 70% of its employees and at least one of those employees obtains cost-sharing or premium
credit through the marketplace (also known as the "exchange") the penalty the employer will be subject to is calculated by taking the total employee count, minus the first 80 employees, multiplied by $2000. Additionally, for any full-time employee who qualifies for premium assistance and purchases coverage through the marketplace, the employer may be subject to a penalty of $3,000 per individual.
Coverage is not Required for Seasonal Workers
Prior to the final regulations, the IRS had not defined the term "seasonal employee" for purposes of the employer responsibility penalty, so employers were permitted to use a reasonable, good faith interpretation of the term through
2014. The IRS indicated that any interpretation of the term "seasonal" probably would not be reasonable if it included a working period of greater than 6 months. The Final IRS rule solidifies that a seasonal worker is one who works less than a period of 6 month. For these individuals, the employer will not be required to offer coverage.
Where to Find More Information
You can find the full text of the Final Rule at:
You can also find additional Treasury Department and IRS information at
As we review and analyze the final regulations, we will provide additional advisory bulletins for our clients. In the meantime, if you have questions about this bulletin or other health care reform topics, please contact Anthony Quinn, Director of Benefits, at 303-225-0400 or [email protected].
Pursuant to IRS Circular 230 - This publication is distributed
with the understanding that the author(s), publisher and distributor are not
rendering tax, accounting, legal or other professional advice or opinions on
specific facts or matters, as each circumstance is unique
Employers with 100 or more employees remain subject to the mandate effective January 1, 2015. The regulations maintain that minimum essential coverage must be offered to 95% of the employer’s full-time employees, however, the regulations have reduced that requirement to 70% through the end of 2015. If an employer does not provide minimum essential coverage to at least 70% of its employees and at least one of those employees obtains cost-sharing or premium
credit through the marketplace (also known as the "exchange") the penalty the employer will be subject to is calculated by taking the total employee count, minus the first 80 employees, multiplied by $2000. Additionally, for any full-time employee who qualifies for premium assistance and purchases coverage through the marketplace, the employer may be subject to a penalty of $3,000 per individual.
Coverage is not Required for Seasonal Workers
Prior to the final regulations, the IRS had not defined the term "seasonal employee" for purposes of the employer responsibility penalty, so employers were permitted to use a reasonable, good faith interpretation of the term through
2014. The IRS indicated that any interpretation of the term "seasonal" probably would not be reasonable if it included a working period of greater than 6 months. The Final IRS rule solidifies that a seasonal worker is one who works less than a period of 6 month. For these individuals, the employer will not be required to offer coverage.
Where to Find More Information
You can find the full text of the Final Rule at:
You can also find additional Treasury Department and IRS information at
As we review and analyze the final regulations, we will provide additional advisory bulletins for our clients. In the meantime, if you have questions about this bulletin or other health care reform topics, please contact Anthony Quinn, Director of Benefits, at 303-225-0400 or [email protected].
Pursuant to IRS Circular 230 - This publication is distributed
with the understanding that the author(s), publisher and distributor are not
rendering tax, accounting, legal or other professional advice or opinions on
specific facts or matters, as each circumstance is unique