The IRS said it will let employers with 50 to 99 full-time employees wait until Jan. 1, 2016, to comply with the Patient Protection and Affordable Care Act group coverage mandate.
But employers with 100 or more full-time employers will have to comply with the Internal Revenue Code Section 4980H "play or pay" provision on Jan. 1, 2015.
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Employers affected by the requirements in 2015 would have to offer coverage to just 70% of full-time workers in the first year and 95% in the second year, according to new final regulations that are set to appear in the Federal Register Wednesday.
Midsize employers that want to wait until 2016 to comply cannot simply downsize to fit into the 50-99 FTE category, but employers close to the 100-employee cut-off may be able to qualify for the mandate delay if they can show they reduced workforce size or hours for bona fide business reasons.
Under PPACA, workers are full-time employees and eligible for the mandated coverage if they work more than 30 hours per week.
Phasing in the penalty should help workers who work 35 hours per week but have been considered part-time workers, IRS officials said.
The regulations — Shared Responsibility for Employers Regarding Health Coverage (RIN 1545-BL33) — implement a tax law added by PPACA Section 1513.
PPACA requires that employers with at least 50 full-time employees, or full-time equivalents, offer health coverage or else pay a penalty for every employee who qualifies for subsidized coverage from the new PPACA health insurance exchange system.
Originally, the mandate was supposed to take effect for all secular employers with 50 or more FTEs this year.
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Allison Bell
Allison Bell, a senior reporter at ThinkAdvisor and BenefitsPRO, previously was an associate editor at National Underwriter Life & Health. She has a bachelor's degree in economics from Washington University in St. Louis and a master's degree in journalism from the Medill School of Journalism at Northwestern University. She can be reached through X at @Think_Allison.
