Just a few days ago, the Department of Treasury and IRS released proposed guidelines pertaining to the Affordable Care Act (ACA).

The proposed guidance offers clarification on several key definitions as well as “pay or play” requirements under the ACA. Until final regulations are released over the coming month, the proposed guidelines remain in effect and should be followed.

SUMMARY REPORT

The summary available here provides you with an overview of the proposed guidelines. The complete Federal Register release may be viewed here.

KEY DEFINITIONS

  • Large employer: Employers with 50 or more full time equivalent employees are subject to the ACA requirements. Only large employers by definition are liable for the assessable payment under Internal Revenue Code 4980H.
  • Full time employee: Employees who work an average of 30 hours per week are considered full time according to the ACA.Currently employers are able to establish their own definition of full time, which is commonly 40 or 32 hours per week.
  • Tax penalties Internal Revenue Code 4980H: If at least one employee receives a premium tax credit or subsidy to purchase insurance through the Exchange, the employer, only large employers by definition above, may be subject to the excise tax described in code 4980H.
  • Non-Calendar Year Plans: Large employers will not face tax penalties for being non compliant in the months prior to the first day of their plan year in 2014. This is good news for employers, allowing them to maintain current benefit plans and not be forced to make mid-year plan design changes.

ADDITIONAL UPDATES

We will continue to routinely send you Legislative Updates as information is released. Be on the look out for details regarding our Health Care Reform Impact Study Tools available. If you are a JA Benefits client, we have or will be in touch soon to obtain the necessary information to begin the study.

If you have any questions related to Health Care Reform or any other employee benefit program, please give us a call at 800-663-5960. We are here to serve you!

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