Early today, the IRS and Treasury jointly announced final regulations for the employer shared responsibility provisions of the Affordable Care Act (ACA). The final regulations include some important changes to the proposed regulations that sponsors of employer health plans will want to take note of, especially:

  • Mid-size employers with 50-99 employees will have reporting requirements for the 2015 calendar year, but will only become subject to shared responsibility payments for 2016.
  • For employers with 100 or more employees - a phased-in approach to the percentage of full-time workers they need to provide with affordable coverage, beginning with 70% in 2015 and 95% in 2016 and beyond.
As has always been the case, employers with less than 50 employees continue to be exempt from the employer shared responsibility provision of the ACA. Regulations for employer reporting are expected to be released by the agencies soon. It should be noted that this announcement does not affect the individual coverage mandate which took effect on January 1. BACKGROUND The ACA employer shared responsibility provision requires employers to provide affordable coverage to their full-time employees or face a penalty. As originally written, it would have taken effect on January 1 this year, however a delay until 2015 was announced last July. We will keep you informed as interpretation and guidance on the final rules become available.