Articles

Employment Law Alert: New Extended Deadlines for Compliance with ACA Employer Mandate

February 12, 2014

On February 10, 2014, the Treasury Department issued new rules that provide a grace period for all employers of over 50 full-time equivalent ("FTE") employees to comply with the Affordable Care Act's ("ACA") "employer mandate."

Mid-size employers of 50-99 FTE employees have been given an extra year (until 2016) to provide health insurance to their full-time employees. Also, larger employers of 100 or more FTE employees who do not manage to cover all full-time employees can avoid the Employer Responsibility payment of $2,000 per employee, if they offer insurance to 70% of these employees by 2015 and 95% by 2016. The ACA defines a "full-time" employee as anyone who works 30 hours or more per week.

For all employers, these new rules provide more time to plan for compliance. Employers of 50-99 FTE employees have additional time to assess whether they will have coverage obligations and provide required coverage, as of January 1, 2016. Employers of 100 or more FTE employees will have additional time to obtain coverage for all of their employees.

All employers who may have seasonal and/or temporary employees may find this time particularly valuable as they start to track the number of employees and hours worked throughout 2014 to determine what their coverage obligations will be. By tracking these employees in 2014, employers will have additional data to rely upon, so that going into the 2015 tracking year, employers of 50-99 FTE employees can better assess the best method for compliance. In addition, after tracking seasonal and temporary employees throughout 2014, some employers who are close to the threshold of 100 or more employees may realize that they are required to meet the 70% covered employee requirement as of January 1, 2015.

In addition, the rules issued on February 10 clarified a number of issues, including how to track the hours of service for certain categories of employees whose hours are hard to track. Specifically, the rules provide that volunteers, such as firefighters and emergency responders do not count as full-time employees. However, educators with summers off, as well as seasonal and temporary employees who work at least six months during the year, are considered full-time employees entitled to be offered coverage.

For more information about the Ralph Civil Rights Act or AB 1825 training, please contact any member of Berliner Cohen’s Employment Law & Litigation Group:

Roberta S. Hayashi, roberta.hayashi@berliner.com
Christine H. Long, christine.long@berliner.com
Susan E. Bishop, susan.bishop@berliner.com
Kara L. Arguello, kara.arguello@berliner.com
Jennifer Y. Leung, jennifer.leung@berliner.com

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Berliner Cohen’s experienced employment law attorneys advise and represent employers and managers on a full range of legal issues affecting the workplace, including harassment and discrimination, unfair competition and trade secrets, wrongful discharge, wage and hour issues, and labor disputes. For over forty-five years, Berliner Cohen, founded and headquartered in San Jose, California, has been one of the most highly-respected full-service business law firms in the region. As one of the largest San Jose-based law firms, Berliner Cohen possesses the specialized expertise required to serve the business and regulatory needs of a diverse clientele, which includes publicly-traded corporations and privately-held entities across various sectors, public agencies and governmental entities, leading real estate developers, owners, operators, managers and investors, and banking and other financial institutions. Berliner Cohen also meets the growing demands of the San Joaquin Valley with its Merced and Modesto offices.