Recently released IRS final regulations for the Affordable Care Act’s (ACA’s) employer shared-responsibility provision provide some short-term relief for mid-sized businesses and large employers.

Under the ACA, the shared-responsibility provision (commonly referred to as “play-or-pay”) applies to “large” employers — those with the equivalent of 50 or more full-time employees. Play-or-pay had been scheduled to go into effect in 2014 but last year the IRS pushed that out to 2015. Now, under the final regulations, eligible mid-sized businesses that otherwise would be considered large employers under the ACA won’t be subject to the provision until 2016. To qualify for the mid-sized businesses relief, an employer must:

  • Employ, on average, fewer than 100 full-time employees or the equivalent during 2014
  • Maintain its workforce size and aggregate hours of service
  • Maintain the health care coverage it offered as of Feb. 9, 2014
  • Certify that it meets these requirements

The final regulations also provide some relief for large employers that don’t qualify for the mid-sized businesses relief. In 2015, they can avoid the penalty for not offering minimum essential coverage by offering such coverage to at least 70 percent of their full-time employees, rather than the 95 percent originally scheduled. The 95 percent requirement will apply in 2016 and beyond.

The final regulations also clarify certain aspects of the play-or-pay provision. Contact Doeren Mayhew’s business advisors in Michigan, Houston or Ft. Lauderdale if you’d like more information on the final play-or-pay regulations or other ACA provisions.