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