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Posted on: January 4, 2013Categories: HR & ComplianceOn December 28th, 2012, the IRS released guidance relating to minimum essential coverage, measuring employees and potential liabilities. This guidance is consistent with prior advice but it does tie together various prior notices. This information highlights the importance of counting employees and measuring hours to determine if they are full or part-time under the provisions defined in PPACA. Employers should start counting now and avoid any confusion over their obligations as we near implementation of these rules in January 2014. On January 2, 2013, the IRS published proposed regulations that address numerous issues regarding ACA’s “pay or play” requirements. The regulations are not final. However, employers may rely on the proposed regulations until final regulations or other applicable guidance is issued. In our view, this is the most important guidance issued since the Supreme Court’s ruling last June. The IRS is accepting comments through March 18, and a hearing is scheduled in Washington on April 23.
Among the highlights of the guidance:
-There is a qualified delay in the 1/1/14 effective date for applicable penalties that will help some non-calendar year plans avoid compliance until 2014 renewal.
-There is a new “substantial compliance” rule that will allow employers to avoid the “no-coverage penalty” (the $2,000 per employee penalty) if coverage is offered to 95% of full-time employees (rather than the 100% standard).
-While the control group rules will apply and employers with common ownership are aggregated for purposes of whether the mandate applies (50+), the IRS clarified that the penalty will be separately applied to individual employers within the group (such that one member’s failure will not affect other members).
If you have any questions on these rules please click here to email for clarification. For more Health Care Reform information click here to read our HCR blog.
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