AFFORDABLE CARE ACT: PLAY OR PAY TRANSITION RELIEF RULES

Transcription

1 PLAY OR PAY TRANSITION RELIEF RULES

2 About ThinkHR A constantly changing health care environment, coupled with PPACA has added to the complexity of hundreds of different employment law issues employers face involving hiring, termination, discrimination, pay and classification, time off/fmla, continuation of benefits for former employees, employee relations, and workplace safety. ThinkHR partners with brokers and their clients to obtain easy and immediate access to expert HR advisors who provide information and answers in a timely manner, minimizing the exposure and risks associated with legal and regulatory matters. For more information or to get pricing, click here Federal regulations (79 Fed. Reg. 8543) provide several transition relief rules to help Large Employers avoid potential Play or Pay penalties for part or all of 2015 (and part of 2016, in some cases). This exhibit summarizes the complex rules and provides reference to the applicable page(s) in the regulations. To review the regulations, Non-Calendar Year Plans Employers are subject to potential Play or Pay penalties as of January 1, Relief available for employer with a non-calendar year plan as of December 27, 2012, provided that the employer: Does not change its plan year date to a later date; Does not offer a calendar-year health plan to participants eligible for the non-calendar year plan; Meets either one of the following conditions: Covered at least one quarter of all its employees as of any date in the 12 months ending on February 9, 2014; OR offered coverage to at least one third of all its employees during the open enrollment period for the plan year that includes February 9, 2014; OR Covered at least one third of its Full-Time employees as of any date in the 12 months ending on February 9, 2014; OR offered coverage to at least one half of its Full-Time employees during the open enrollment period for the plan year that includes February 9, 2014; AND Offers adequate coverage to Full-Time employees as of the first day of the non-calendar plan year beginning in 2015.

3 If all conditions are met, Play or Pay penalties will not apply for the months in 2015 that precede the start of the employer s 2015 plan year. Reference: 79 Fed. Reg Shorter Measurement Periods Permitted for Stability Periods Starting During 2015 For ongoing employees determined to be Full-Time employees, the Stability Period is the greater of six months or the length of the corresponding Measurement Period. Only for purposes of Stability Period beginning in 2015, the employer may pair a short Transitional Measurement Period (TMP) with a 12-month Stability Period if: The Transitional Measurement Period is at least six consecutive months; The Transitional Measurement Period begins no later than July 1, 2014; and The Administrative Period (the period between the Transitional Measurement Period and the corresponding Stability Period) does not exceed 90 days. Reference: 79 Fed. Reg Shorter Period Permitted for Determining Applicable Large Employer Status for 2015 Count full-time-equivalent (FTE) employees each month of the calendar year, and divide by 12, to determine Large Employer status for the following year. (E.g., count all of 2014 to determine status for 2015.) Employer may count FTEs over any period of six consecutive months in 2014 to determine Large Employer status for Note: This transition relief rule is not available for an employer that subtracts certain seasonal workers, if permitted, from its FTE count. Reference: 79 Fed. Reg Offer of Coverage for January 2015 Coverage offer must begin on first of month to avoid potential Play or Pay penalty for that calendar month. For January 2015 only, employer will not be subject to a Play or Pay penalty for the period between 1/1/2015 and the start of the first payroll period beginning in 2015, if the penalty would not otherwise apply. Reference: 79 Fed. Reg Coverage for Dependents Coverage must be offered to Full-Time employees and their biological and adopted children (including children placed for adoption) up to age 26. Relief available for an employer that currently does not offer dependent (child) coverage but takes steps toward offering dependent (child) coverage during its 2014 or 2015 plan year. Reference: 79 Fed. Reg

4 Large Employers with fewer than 100 Full-Time Employees (including FTEs) Large Employer (50 or more FTEs in prior year) is subject to potential Play or Pay penalties For 2015, relief available for employer with FTEs that: Does not reduce its workforce size, or reduce hours of service of its workforce, through 2014 to get under 100 FTEs, unless for bona fide business reasons; Does not eliminate or reduce level of coverage, or narrow eligibility, that was in effect as of February 9, 2014 through the end of the 2015 plan year; AND Certifies that conditions are met on employer health coverage reporting form. Reference: 79 Fed. Reg Interim Guidance with respect to Multiemployer Arrangements Large Employer is subject to potential Play or Pay penalties for failure to offer Full-Time employees affordable minimum value coverage. No Play or Pay penalty applies with respect to a Full-Time employee if: Employer is required to contribute to multiemployer plan (per collective bargaining agreement (CBA) or similar participation agreement); and Affordable minimum value coverage under the multiemployer plan is offered to the employee (and dependents). Reference: 79 Fed. Reg. 8576

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