Health Care Law Blog

Employer Mandate Delayed…Again

On Feb. 12, 2014, the U.S. Department of Treasury and the Internal Revenue Service published final rules (the “Final Rules”) related to the Employer Shared Responsibility provisions of the Patient Protection and Affordable Care Act (“PPACA”). The Employer Shared Responsibility provisions, referred to as the “Employer Mandate,” generally require certain employers to offer minimum essential health care coverage to their full-time employees or face penalties. The Employer Mandate was originally scheduled to become effective on Jan. 1, 2014 but was delayed until Jan. 1, 2015.

The Final Rules include a second delay of the Employer Mandate. They provide that employers who employ 50 – 99 full time equivalent employees will not be required to comply with the Employer Mandate until Jan. 1, 2016. Additionally, those employers who employ 100 or more full time equivalent employees must offer minimum essential coverage to only 70 percent of those full time employees by Jan. 1, 2015 (as opposed to the 95 percent coverage requirement under the previous regulations). Those employers employing 100 or more full time employees will be required to offer coverage to 95 percent of all full time employees by Jan. 1, 2016. The chart below summarizes the basic details concerning this delay.

Employer Size	Employer Mandate Requirement	Deadline
1-49	N/A	N/A
50-99	Offer coverage to 95% of full-time employees	01/01/2016
100+	Offer coverage to 70% of full-time employees Offer coverage to 95% of full-time employees	01/01/2015 01/01/2016

The Final Rules also clarify a number of other PPACA provisions and provide additional guidance to employers. Among other things, they address how employees working in certain occupations (such as volunteer firemen, adjunct faculty, students, seasonal employees and educational employees) must be treated for purposes of the Employer Mandate. They extend transitional rules (related to non-calendar year plans, reduced measurement periods, etc.) beyond 2014. They also promise additional guidance related to employer information reporting requirements. 

Upon initial review, the Final Rules may seem to provide an express benefit to employers: additional time to prepare for the Employer Mandate’s implementation. However, they also add an additional level of complexity to an employer’s analysis of how it should best prepare for implementation.

The fact that the legal authority related to PPACA changes so frequently underscores the importance of working with a trusted legal adviser to develop a strategy. Foster Swift attorneys welcome the opportunity to discuss with you the impact that the Final Rules may have on your business.

Categories: Health Care Reform, Insurance, Tax