Employer Mandate

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Companies with 50+ FTEs must offer qualified, affordable coverage or pay a big penalty.

Overview

The employer shared responsibility provisions, contained in section 4980H of the Internal Revenue Code (Code), provides that an applicable large employer (for this purpose, an employer with 50 or more full-time equivalent employees) could be subject to an assessable payment if any full-time employee is certified to receive an applicable premium tax credit or cost-sharing reduction payment. Generally, this may occur where either:

  1. The employer does not offer to its full-time employees (and their dependents) the opportunity to enroll in minimum essential coverage under an eligible employer-sponsored plan; or
  2. The employer offers its full-time employees (and their dependents) the opportunity to enroll in minimum essential coverage under an eligible employer-sponsored plan that either is unaffordable relative to an employee’s household income or does not provide minimum value.

For purposes of section 4980H, a “full-time employee” is an employee who is employed on average at least 30 hours per week.

Source: IRS Notice 2012-17

Regulations and Guidance

Employer Shared Responsibility Final Rule
This formatted version of the final rule makes it easy to find the information you’re looking for. The final rules explain the concepts of minimum essential coverage and minimum value, discuss the monthly and look-back measurement methods, and provide some transition relief for 2015. (02/09/2014)
IRS Notice 2013-45: Transition relief from the Employer Shared Responsibility provisions for 2014
This notice provides transition relief for 2014 from the information reporting requirements applicable to insurers, self-insuring employers, and certain other providers of minimum essential coverage and the employer shared responsibility provisions under § 4980H. This transition relief will provide additional time for input from employers and other reporting entities in an effort to simplify information reporting consistent with effective implementation of the law. This transition relief also is intended to provide employers, insurers, and other providers of minimum essential coverage time to adapt their health coverage and reporting systems. Both the information reporting and the Employer Shared Responsibility Provisions will be fully effective for 2015. (07/09/2013)
Proposed Regulations on the Employer Shared Responsibility Provision
This document contains proposed regulations providing guidance under section 4980H of the Internal Revenue Code (Code) with respect to the shared responsibility for employers regarding employee health coverage. These proposed regulations would affect only employers that meet the definition of “applicable large employer” as described in these proposed regulations. Employers may rely on these proposed regulations for guidance pending the issuance of final regulations or other applicable guidance. (12/28/2012)
IRS Notice 2012-58: Determining Full-Time Employees for Purposes of Shared Responsibility for Employers Regarding Health Coverage (§ 4980H)
This notice describes safe harbor methods that employers may use (but are not required to use) to determine which employees are treated as full-time employees for purposes of the shared employer responsibility provisions of § 4980H of the Internal Revenue Code (Code). Specifically, the administrative guidance in this notice, modifying and expanding on previous guidance, includes a safe harbor method that employers may apply to specified newly-hired employees. (08/31/2012)
IRS Notice 2012-17: Frequently Asked Questions from Employers Regarding Automatic Enrollment, Employer Shared Responsibility, and Waiting Periods
This notice, which is being issued in substantially identical form by the other two Departments, provides information on questions from employers and other stakeholders regarding the provisions of the Affordable Care Act governing automatic enrollment, employer shared responsibility, and the 90-day limitation on waiting periods. (04/23/2012)
IRS News Release IR-2011-92
“Treasury, IRS Seek Public Input on Certain Employer Provisions of the Affordable Care Act” (09/13/2013)
IRS Notice 2011-73
Request for Comments on Health Coverage Affordability Safe Harbor for Employers (Section 4980H)
IRS News Release IR-2011-50
“Treasury, IRS Seek Public Input on Certain Employer Provisions of the Affordable Care Act” (05/13/2011)
IRS Notice 2011-36
Request for Comments on Shared Responsibility for Employers Regarding Health Coverage (Section 4980H)

Look Back Periods Article

Leavitt Group Article on the Look Back Measurement Method


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