Employer Mandate

Under Internal Revenue Code section 4980H, an Applicable Large Employer may be subject to a penalty if it does not offer its full-time employees, and their dependents, minimum essential coverage that is affordable and provides minimum value.

Transition Relief for 2015

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The penalties under the Employer Mandate were originally set to be effective January 1, 2014 but were postponed to January 1, 2015.  On February 10, 2014, the Department of the Treasury issued final regulations that included transitional relief for 2015.

Large Employers with 50 to 99 Full-Time Employees

The final regulations provide significant transition relief for large employers with 50 to 99 full-time employees.  If certain requirements are met, these eligible employers will not be subject to either the “A” or “B” penalties for any month in 2015, plus any months in 2016 that are part of the 2015 plan year.

Large Employers with 100 or More Full-Time Employees

Large employers offering coverage to at least 70 percent of their full-time employees will not be subject to the “A” penalty for each month of 2015, including any months in 2016 that are part of the 2015 plan year.  This relief is applicable only to the “A” penalty.  Large employers remain subject to the “B” penalty starting on January 1, 2015.

More information, including details on the requirements that must be met to use the relief, is available in our February 2014 Briefing “Health Care Reform: Employer Shared Responsibility Transition Relief” that is available below.

Relief for Non-Calendar Year Plans

The effective date for the 70 percent threshold is January 1, 2015 regardless of whether the employer offers a calendar year or non-calendar year plan.  However, large employers with non-calendar year plans can delay the effective date until the first day of the 2015 plan year if they meet the requirements for one of three pieces of non-calendar year transition relief.  Details about the requirements are outlined in our July 2014 and April 2015 Briefings, which you can find below.

Additional Information
Health Care Reform: Employer Shared Responsibility Transition Relief
This Briefing describes the transition relief under IRC section 4980H that is available to Applicable Large Employers for 2015.
Health Care Reform: IRC §4980H Transition Relief for Non-Calendar Year Plans
This Briefing outlines the transition relief under IRC section 4980H that is available to Applicable Large Employers with non-calendar year plans.
Health Care Reform: How Does IRC §4980H Transition Relief Apply to Non-Calendar Year Plans?
This Briefing provides examples of how this transition relief may delay the effective date of the penalties for non-calendar year plans.