Starting on January 1st, 2014, large employers will face a “pay or play” penalty if they do not offer minimum essential coverage to full-time employees and their dependents. This penalty, of course, is part of the employer shared responsibility requirements within the Affordable Care Act (ACA).
We recently helped a client answer the following question regarding that law. The question was: For Fiscal Year Plans (i.e. “non-calendar year plans”), what is the deadline for employers to offer coverage?
Transition Relief from the IRS
While the penalty goes into effect on 1/1/2014, the IRS recognizes that it may be difficult to make mid-year changes to a plan’s terms. Thus, they have released proposed regulations regarding transition relief for those companies.
Here are two of the key items worth noting in those regulations:
For any employees who are eligible to participate in the plan under its terms as of December 27, 2012, the employer will not be subject to a potential payment until the first day of the fiscal plan year starting in 2014.
If the plan was offered to at least 1/3 of the employer’s employees or the plan covered at least 1/4 of the employer’s employees, then the employer will not be subject to the penalty until the first day of the fiscal plan year starting in 2014.
Of course, that is contingent on the company offering those full-time employees affordable coverage that provides minimum value no later than that first day.
The Impact on Your Company
At CBG Benefits, we recognize that navigating health care reform has proven to be a tremendous task and challenge for many employers.
As an insurance broker, we want to do all we can to handle that for you, so that you can concentrate on growing your business.
To learn how we can provide guidance, direction, and insight to your business, please contact our team today.