Final ACA Regulations Released – More Delays for Employer Mandate

February 14, 2014

The U.S. Treasury Department has just released its final regulations implementing the employer shared responsibility requirements under the Affordable Care Act (ACA).  The ACA requires applicable large employers (those with 50 or more employees) to offer coverage to at least 95 percent of its full-time employees. Originally, this mandate was to start in 2014 but is delayed until 2015. Though the regulations are quite lengthy, below are two of the more important changes to the mandate as well as some much needed clarifications.

  • Employers with 50-99 employees will not have to comply with the employer mandate until 2016. Employers with 100 or more employees will still need to comply with the employer mandate beginning in 2015.
  • Employers with 100 or more employees can avoid paying any penalties in 2015 as long as they provide coverage to 70 percent of their full-time employees in 2015 and 95 percent of their full time employees in 2016 and beyond. This provides employers with a phase-in approach to satisfy the mandate. The proposed regulations called for 95 percent coverage in 2015.

The final regulations also clarify whether employees of certain types or occupations are considered full-time:

  • Employees who work in positions for which the customary annual employment is six months or less will not generally be considered full-time employees.
  • Teachers and other educational employees will not be treated as part-time simply because their school is closed or operates on a limited summer schedule. Special rules will apply for adjunct faculty.
  • Hours contributed by bona fide volunteers to a government agency or tax-exempt agency (e.g., volunteer firefighter) are not counted and will not cause them to be considered full-time.
  • Students performing services through a work study program are not counted in determining whether they are full-time employees.

Future Benefits Alerts will address the other provisions of the regulations.  In the meantime, do not hesitate to contact a member of our Employee Benefits and Executive Compensation Practice Group with any questions.