**Employer Mandate Delay to 2016 for Mid-Size Employers (50 – 99 FTEs)

-          The government has delayed the application of any assessable payment under section 4980H (“pay or play taxes”) for employers with 50 – 99 full time equivalents, to begin January 1, 2016. However, three restrictions are in place, that mid-size employers must comply with to receive this relief:

1.      Maintain Any Currently Offered Health Coverage: From
Feb 9, 2014 to Dec 31, 2015, you cannot eliminate or
materially reduce the health coverage offered as of
Feb 9, 2014. Any reduction in premiums paid below 95%
 of the dollar amount in place as of Feb 9, 2014 will
disqualify the employer from this relief

2.      Only Legitimate Changes in Workforce Size: From
February 9, 2014 to December 31, 2014, any reduction
 or change in workforce size or overall hours of service
 strictly to maintain eligibility (or become eligible) for
this relief, could disqualify the employer from relief

3.      Certify Eligibility For Transition Relief with IRS: In
conjunction with Section 6056 reporting, you must
certify to the government you are an employer with
over 50 and under 100 FTEs, and you have met the
criteria in items #1 and #2

Employer Mandate Transition Relief for Large Employers (100+ FTEs)

-           The government has provided two key elements of transition relief for large employers, that will ease the full adoption of the Employer Mandate:

1.      Lower Participation: For the plan year
starting on or after Jan 1, 2015, as long as at
least 70% of full-time employees are offered
coverage of minimum value, the employer can
avoid the $2,000 “pay or play” tax

2.      Lower Fee If Coverage Is Not Offered: For the
plan year starting on or after January 1, 2015, the
fine will be calculated by subtracted 80 full-time
staff from the employer’s total, rather than 30.

Other Guidance and Transition Relief and Guidance

-          Definition of Employee Categories: The final regulations provide clarifications regarding whether specific employee types and certain occupations are considered “full-time” (e.g. volunteers, educational employees, seasonal employees, student work-study programs, and adjunct faculty). The most broadly applicable relief in this area is the clear definition of seasonal employees. The guidance clarifies that employees for which customary annual employment is six months or less, generally will not be considered full-time employees.

-          Affordability Safe Harbors: The final regulations have adopted the affordability safe harbors that were outlined in the proposed regulations. There are little/no changes to be aware of in this area.

-          Transition Relief: Determining Large Employer Status: employers are permitted to use any consecutive six-month period in the 2014 calendar year to determine their large employer status in 2015. This may prove advantageous to employers with significant growth in headcount in 2014. By selecting the 6-month period with the lowest headcount, they may delay the requirement to offer coverage for one additional year.

-          Transition Relief: Non-Calendar Year Plans: the final rules generally provide relief for non-calendar years plans from any assessable payment under section 4980H (“pay or play taxes”), for the months from January 1, 2015 to the start of their plan year in 2015 (e.g. April 1, 2015). Employers are not permitted to change their plan year at this time, to take advantage of this relief.

-          Transition Relief: Measurement Periods/Stability Periods: in applying the use of measurement periods, it is often financially advantageous for employers to adopt a 12-month stability period. This minimizes administrative burden, while placing the longest period of time for variable hour employees to become eligible for coverage. The final regulations allow employers to use a 6-month measurement period in conjunction with a 12-month stability period, for the 2015 plan year.

-          Transition Relief: Dependent Coverage: for employers not currently offering dependent coverage to full-time staff, or that offer coverage that is not considered MEC (“Minimum Essential Coverage”), but are working to adopt this provision, no assessable payment will be due for the 2015 plan year.

Whether you are a mid-size or large employer, there are still important steps to take to be prepared for 2015. Contact us today, to prepare a strategy together.