[February 14, 2014] Employers with 50 to 99 full-time workers now have an additional year to “play or pay” under the Patient Protection and Affordable Care Act (“ACA”), i.e., to offer health insurance to full-time workers or pay a fee. Newly issued final rules require these mid-size employers to offer coverage by 2016, instead of 2015. To be eligible, an employer must certify to the U.S. Treasury Department that it has not laid off employees in order to fall below the 100-employee threshold. Although not required to provide coverage in 2015, mid-sized employers must still comply with reporting requirements in 2015.
Employers with 100 or more full-time equivalent employees are still required to provide coverage no later than January 1, 2015, or the start of their plan year in 2015 (for non-calendar year plans). However, to avoid paying a penalty, such larger employers must offer coverage only to 70% of their full-time workers in 2015. Beginning in 2016, employers must offer coverage to at least 95% of full-time workers.
In order to prepare for 2015, larger employers may use a look-back period during 2014 to determine whether an employee is a full-time employee under the ACA, i.e., works 30 hours or more per week. (While there are bills pending in Congress that would change the ACA’s definition of full-time employee from the current 30-hour per week rule to a 40-hour rule, the bills have little Democratic support.) Although it may be tempting to wait and see what further delays or changes may come, larger employers should begin now to prepare for 2015.