ACA-Another Delay

By Bonnie Bochniak

Recently another delay was announced in regards to the Affordable Care Act (ACA) by the U.S. Treasury Department, on February 10th, 2014.  The U.S. Treasury Department states that, approximately 96 percent of employers are small businesses that have fewer than 50 workers.
 
This newest change to the ACA will allow more transition time for businesses ranging from 50-99 full time equivalent (FTEs) employees, and also loosen the leash on those employers with 100 or more FTEs in offering healthcare, temporarily.

To permit a more gradual phase-in for employers, highlights from the final rules state that:

–To be eligible, an employer must go through a certification process stating that during the time-frame beginning February 9th, 2014, and ending on December 31, 2104, the employer does not reduce the size of its workforce or the overall hours of service of its employees in order to appease the workforce size provision.

-The employer responsibility provision will generally apply to larger firms with 100 or more FTEs starting in 2015 and employers with 50 or more full-time employees starting in 2016.

-To prevent a payment for failing to offer health coverage, employers must offer coverage to 70 percent of their full-time employees in 2015 and 95 percent in 2016 and beyond.  In addition, for example, this will aid employers that may want to only offer coverage to employees with 35 or more hours, but not yet to that sector working 30-34 hours.

-Employers may establish a six-month period in 2014 to count employees to determine if the mandate applies for the following year.  If the employer uses the last few months of the year as its measurement period for applicability, the employer will not have to have a compliant plan in place for all employees by January 1st, 2015. The employer will not be subject to penalties for the first three months of the year if such an employer establishes a compliant plan and offers it to all eligible employees by April 1st, 2015.

-The rule that employers offer coverage to their full-time employee’s dependents will not apply in 2015 to employers that are taking steps to set up for such coverage in 2016.

-It retains the requirement for an employer to use when categorizing an employee with a break in service as a “rehire” with regard to the coverage rules, but reduces the length of the break in service required before returning employee may be treated as a new employee from 26 weeks, to 13 weeks. This does not apply to certain educational organization employers. To avoid educational employees being treated as rehires after summer break, the 26 week window is applied.

As always, please contact our government relations team if you have any questions.  By phone: 586-393-8800 or by email: bbochniak@michbusiness.org.