News Alert – Feb. 12, 2014
Applies to: All Groups
Federal Government Releases Final Rule on Employer Shared Responsibility
On Feb. 10, 2014, the Internal Revenue Service released its final rule on the Employer Shared Responsibility provisions of the Affordable Care Act (ACA).
Highlights from the new guidance include the following:
- Exempts employers with between 50 and 99 full-time employees from the shared responsibility penalty until 2016, if the employer provides an appropriate certification and meets certain conditions.
- To avoid a penalty in 2015, employers subject to the mandate must offer coverage to 70 percent of their full-time employees or risk penalties for failure to offer coverage to all full-time employees and dependents.
- To avoid a penalty in 2016, employers subject to the mandate must offer coverage to 95 percent of their full-time employees (and dependents).*
Employers with fewer than 50 full-time employees are not subject to the Employer Shared Responsibility provisions of ACA.
We are currently reviewing the final rule and will provide more information as it becomes available.
*This rule applies whether the failure to offer coverage is intentional or unintentional. However, this rule does not shield the employer from the penalty for offering inadequate coverage if any of the full-time employees, including those who are not offered coverage at all, receive a premium tax credit or cost-sharing subsidy for purchasing coverage through the Health Insurance Marketplace.
This communication is intended for informational purposes only. It is not intended to provide, does not constitute, and cannot be relied upon as legal, tax or compliance advice. The information contained in this communication is subject to change based on future regulation and guidance.