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Northwest OH Legal Blog

Tuesday, February 25, 2014

Midsize Companies Get Transition Relief in Final Rules on ACA Employer Mandate

The Treasury Department issued final rules on the Affordable Care Act's employer mandate February 10, 2014 which granted significant new transition relief to employers with 50 to 99 full-time employees.

The final rules (T.D. 9655) under tax code Section 4980H (also known as the employer shared-responsibility provisions) provide that beginning January 1, 2015, the mandate will only apply to companies with more than 100 full-time employees. The rules will apply to midsize businesses beginning Jan. 1, 2016. The final rules are scheduled to be published in the Feb. 12 Federal Register.

To avoid a payment for failing to offer health coverage, employers will need to offer coverage to 70 percent of their full-time employees and/or full-time equivalents in 2015 and 95 percent in 2016 and beyond, Treasury said. During a February 10, 2014 conference call a senior Treasury official said the changes will provide significant relief to midsize businesses as they seek to comply with the health-care law.  According to Treasury Department estimates, midsize businesses are about 2 percent of the total number of employers in the U.S.

The final rules did not change the definition of full-time employee, maintaining the 30-hours-a-week threshold.

In July 2013, the Obama administration delayed for one year the January 1, 2014, effective date of proposed rules (REG-138006-12) under Section 4980H on mandatory reporting requirements for employers and health insurers, as well as related employer shared-responsibility penalties


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