Another Delay in the Affordable Care Act for Employers with 50- 100 Employees

The Obama administration released final rules on the Affordable Care Act’s employer shared responsibility provisions under tax code Section 4980H. On February 12, 2014, the Internal Revenue Service (IRS) and the Treasury published the final regulations pertaining to the Employee Shared Responsibility Provision of the Affordable Care Act. Under the tax code, applicable large employers may be subject to a penalty tax for failing to offer minimum essential coverage to full-time employees an their dependents; or offering minimum essential coverage that is not affordable or does not offer minimum value.

The mandate becomes effective Jan. 1, 2015, for employers with 100 or more full-time employees, but the rules include transition relief for employers with 50 to 99 employees, giving them a delayed effective date of Jan. 1, 2016.

To avoid ACA penalties, employers will have to offer coverage to 70 percent of their full-time employees in 2015 and 95 percent in 2016 and beyond, according to a Treasury Department fact sheet. The IRS also highlighted key aspects of the rules in a set of 46 questions and answers. For related information, see the discussion of “Minimum Essential Coverage and Employer Penalties” in chapter Affordable Care Act: Employer Health-Care Provisions.

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