Major changes were made in the Affordable Care Act by “final rules” issued on February 12 by the U.S. Treasury and the IRS. These are the changes that are most likely to impact our members:
- Companies with 50-99 employees are now required to provide coverage to employees who work 30 hours a week or more starting on January 1, 2016 … a delay of a year. Employers with fewer than 50 full-time or full-time equivalent employees continue to be exempt from the employer mandate.
- Employers are prohibited from laying off or firing workers to keep their employment under 100 in order to qualify for the delay of coverage until 2016. The IRS intends to require employers to certify, under penalty of perjury, that they have complied with this new rule. This requirement will almost certainly be challenged in court and is VERY controversial.
- Employers with 100 or more full-time and full-time equivalent employees now need to offer coverage to at least 70% of their employees in 2015 and to 95% in 2016 and beyond. (The requirement had been 95% in 2015.) Employers in this category that do not meet these standards will make an employer responsibility payment for 2015.
- Seasonal employees: Those in positions for which the customary annual employment is six months or less generally will not be considered full-time employees. The announcement didn’t change the previous guidance that employers who have more than 50 employees for 120 days in a calendar year or less are not considered large employers.
Other changes that have received less attention include:
- Make permanent the “look-back measurement method:” The final rule gives covered employers the option of using a look-back period to measure the full- or part-time status of variable-hour and seasonal employees. This measurement method can give employers more stability and predictability in knowing which employees are eligible for health care coverage under the law. The Treasury Department also clarified that seasonal employees in positions working six months or less in a year generally aren’t considered full-time employees.
- Offer transition relief for employers with non-calendar-year health plans. For covered employers who offer non-calendar-year plans, the final rule clarifies that the employer mandate will take effect on the first day of their plan year in 2015, rather than Jan. 1, 2015.
