Pay or Play Mandate: The Forgotten Employees

The Patient Protection and Affordable Care Act (ACA) has brought sweeping changes throughout our country since its inception, affecting individuals and businesses alike with countless mandates, and imposing penalties and taxes for noncompliance.  In 2014, individuals must secure health care coverage or face taxation.  The counterpart to this provision requires employers that employ at least 50 full-time employees (including full-time equivalent employees) (Applicable Large Employers)[i] to offer affordable coverage to their full-time employees or, as with the individual mandate, face a penalty.[ii]  Although the employer shared responsibility mandate, found in section 4980H and its related proposed regulations (Pay or Play Mandate), has been delayed until 2015, Applicable Large Employers should waste no time and take this opportunity to carefully strategize their approach toward compliance, including (1) analyzing their employee population, (2) ensuring that coverage is affordable and provides minimum value, and (3) contemplating how and when to calculate full-time employee status, either on a monthly basis or by using the safe harbor look-back provisions (found in the proposed regulations) in which they need to set measurement periods and subsequent stability periods, and decide whether to use administrative periods.[iii]  Additionally, many employers must substantially revise their eligibility criteria, amend plan documents, and update policies, procedures, handbooks and other materials to reflect the new standard for full-time eligibility and, if applicable, continuation of coverage during a subsequent stability period.  With these mountainous tasks loaded upon employers, one simple question may be forgotten:  “Who are my employees?”

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The Impact of Health Care Reform on Large Employers

 In early July, the Department of Treasury announced it is delaying a key mandate of the Affordable Care Act:    what’s known as the ‘Pay or Play‘ mandate. While pushing pause on this mandate gives large employers another  year to prepare, we strongly advise businesses not to wait to start making strategic decisions.

Attorney Mike James put together an information presentation for large employers: You can view the  presentation here.

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