The Internal Revenue Service has released final regulations concerning the employer shared responsibility provisions that take effect next year under the Patient Protection and Affordable Care Act.
Under the PPACA, businesses and companies with 50 or more employees are mandated to offer health insurance to those employees or pay a penalty. Those that don't must make a shared responsibility payment to help offset the costs to taxpayers that result from employees getting premium subsidies to buy coverage through the health insurance exchanges.
According to the final regulations, the employer mandate or responsibility provision will apply to firms with 100 or more full-time employees starting in 2015 and to businesses with 50 or more full-time workers beginning in 2016. To avoid penalty payments, employers must offer coverage to 70 percent of their full-time workers in 2015 and 95 percent in 2016 and beyond.
The PPACA definition of full-time employees encompasses those who work an average of 30 hours per week. It generally doesn't include volunteers, seasonal employees and students in work-study programs. For more information, read the full text of the final regulations here.
Earlier this week, the Obama administration decided to delay the employer mandate by one year until 2016 for businesses with 50 to 99 full-time employees. The provision was originally due to take effect this year, but federal officials decided last summer to delay its implementation until 2015 in order to give the government ways to simplify reporting requirements for employers and to adapt health coverage and reporting systems.
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