Enforcement of the employer shared responsibility provisions of the Affordable Care Act (ACA) has been further delayed for employers with between 50 and 99 full-time equivalent employees and temporarily eased for employers with 100 or more full-time equivalent employees. The relief was announced on February 10, 2014, when the Department of Treasury (Treasury) and Internal Revenue Service (IRS) issued their "Shared Responsibility for Employers Regarding Health Coverage" final regulations.

Employers with 50 to 99 Full-Time Equivalent Employees

Employers with between 50 and 99 full-time equivalent employees will not be subject to the Internal Revenue Code Section 4980H penalties for failure to offer qualifying healthcare coverage until 2016, so long as they maintain (or do not materially reduce) the coverage they offered as of February 9, 2014, and comply with the yet-to-be-proscribed certification requirements. Note, this relief will not be available for employers which previously had 100 or more full-time equivalent employees, unless the workforce reduction is the result of a bona fide business reason unrelated to the transitional relief.

Employers with 100 or More Full-Time Equivalent Employees

Employers with 100 or more full-time equivalent employees who fail to offer qualifying healthcare coverage will be subject to the Code Section 4980H penalties in 2015. However, they need only offer coverage to at least 70 percent of their full-time employees to escape liability for assessable payments under Code Section 4980H(a). In 2016, the 70 percent threshold will be raised to 95 percent for employers of 100 or more full-time equivalent employees seeking to avoid Section 4980H(a) liability. In addition, for purposes of calculating the assessable payment owed under 4980H(a) in 2015, the final regulations temporarily increase the full-time employee exclusion from 30 to 80 full-time employees.

Other Helpful Clarification in the Final Regulations

Along with the enforcement delays and easing, the final regulations provide helpful clarifications on many aspects of the ACA's employer shared responsibility provisions for which guidance already has been issued. Clarifications are provided for:

• Determining applicable large employer status;
• Determining hours of service;
• Determining full-time employee status;
• Affordability and affordability safe harbors;
• Qualifying offers of coverage;
• Calculation of assessable payments;
• Definition of dependent;
• Worker classification issues;
• Specific employment situations; and
• International issues.

Treasury also indicated that guidance for the ACA's employer reporting requirements will be issued in the near future.