On Monday February 10th,
the Federal Government issued several updates to the Affordable Care Act. Below is a listing of the regulation revisions
the government provided.
The Employer Mandate by Employee Population Size
Employers who have an
employee population between 50 to 99 full-time employees will not be subject to
any fines or penalties for not providing their employees and their families
with health insurance coverage until the employer’s first renewal period that
begins on or after January 1, 2016.
Employers will need to confirm that they will not be downsizing their
employee population in order to fall and stay below the threshold of 100
employees.
Employers who have an
employee population that is greater than 100 full-time employees will not be
subjected to any fines or penalties for only providing coverage to 70% of their
full-time population in 2015. Beginning
in 2016, employers will be required to provide health insurance coverage to at
least 95% of their full-time employee population.
There has been no change in
the definition of a full-time employee which will continue to be classified as
any employee who works at least 30 hours or more per week. There have been changes in the definition of
a dependent, which now does not include any step-children or foster children.
2015 Transitional Relief
The Federal Government has
provided employers with the final changes pertaining to transitional relief. The changes will include:
- Employers whose health insurance plan is categorized as a
non-calendar year will be required to conform with the employer mandate on
the plan’s first year that begins on or after January 1, 2015.
- As long as the employer is making strides to provide dependent
coverage by 2016, the employer will not be required to offer dependent
coverage in 2015.
- In determining how many full-time equivalent employees an employer
has, it is suggested the employer use the “six month” look back period in
determining if they have above 100 full-time equivalent employees.
- Employers will also be able to use this method in determining the
stability period for employees whose hours may fluctuate and if the
employer is required to offer these employees coverage.
There has also been relief to
categorize the coverage obtained through the Marketplace as an allowable
Section 125 status change. This relief
will be provided in 2014, but has not yet been determined if it will be
extended for future years.
How to Categorize Full-Time Employees
- Workers in volunteer positions for the government such as
volunteer firefighters and first responders will not be categorized as
full-time employees.
- Even though teachers and other education personnel may not work a
full year, they are to be categorized as full-time employees.
- Employers who hire seasonal employees who work less than half a
year will not be considered full-time employees
- Universities and Colleges can attribute 2 ¼ hours of work for
adjunct professors for every hour they instruct.
- Students who participate in a federal or state work study program
are not categorized as full-time employees.
Safe Harbors for Affordable Coverage
To determine if an employer
provides affordable health insurance coverage, employers may use the federal
poverty level, hourly rates, or an employee’s W-2 wages to calculate if the
health insurance plan the employer offers is affordable. If an employer is to use the W-2 safe harbor
provision, the employer must report the full wages for the employee which will
not be used for any salary reduction elections under the company’s 401(k) plan
or the company’s Section 125 plan.
Recently Established Businesses and New Employees
For employers who recently
established their business this year, they should classify their company as a
large group or a small group based on the total number of employees they expect
to hire and have on staff for business days during the current year.
