February 2013 Health Care ReformPosted on: February 6, 2013Categories: HR & Compliance
Pay or Play: Identifying Full Time Employees
On Jan. 2, 2013, the Internal Revenue Service (IRS) released long-awaited proposed regulations on ACA’s employer penalty provisions. Although the proposed regulations are not final, employers may rely on them until further guidance is issued.
The proposed regulations provide guidance on an optional method for identifying full-time employees for purposes of determining and calculating an employer’s potential liability for a shared responsibility payment.
The proposed regulations also include important transition relief. Employers that intend to utilize the look-back measurement method for determining full-time status for 2014 will need to begin their measurement periods in 2013 to have corresponding stability periods in 2014. The IRS recognizes that employers that intend to adopt a 12-month measurement period and a 12-month stability period will face time constraints.
Under the proposed regulations’ transition relief, solely for purposes of stability periods beginning in 2014, employers may adopt a transition measurement period that:
- Is shorter than 12 months, but not less than 6 months long; and
- Begins no later than July 1, 2013, and ends no earlier than 90 days before the first day of the first plan year beginning on or after Jan. 1, 2014.
For additional information & specific examples view the Legislative Briefs and resources below.