Final regulations recently released by Treasury and the IRS have provided a complete deferral of the shared responsibility requirements for employers with 50-99 employees until 2016, and some relaxation of requirements in 2015 for employers with more than 99 employees. The requirement to offer coverage for those employers will now be satisfied if they offer coverage to 70% of their full-time (i.e., 30 hours/week) employees (vs. 95%) and those employers failing that requirement can exempt the first 80 employees from the penalty calculation in 2015 (vs. 30).
But those employers will still face penalties for any of their full-time employees receiving subsidized coverage through the public exchanges. Avoiding that penalty will require that employees have access to affordable coverage meeting minimum plan value requirements.
The 30-hour rule has employers in industries with a lot of part-time or variable hours employees (e.g., retail, hospitality) grappling with the additional cost of expanding eligibility to much more of their workforce, as well as the process of measuring just who is and who isnt a 30-hour employee.
And, even though the excise tax isnt effective until 2018, the exposure for some employers is so great and the corrective action so dramatic to reduce or eliminate that exposure, that many of them began efforts last year to create a glide path to 2018, so as not to have to rip the band-aid off too quickly, and much too painfully, in 2017. According to a Mercer survey conducted in 2013, almost a third of employers were already making changes to health care benefits for the upcoming plan year in anticipation of the 2018 excise tax.
Lane is a principal at Mercer and employee benefits consultant. He is also an EBA Advisory Board member.
