ACA Action Steps for 2014: Another Look at the ACA's Shared Responsibility Provisions

By Sears, Christopher S. | Government Finance Review, April 2014 | Go to article overview

ACA Action Steps for 2014: Another Look at the ACA's Shared Responsibility Provisions


Sears, Christopher S., Government Finance Review


[ILLUSTRATION OMITTED]

Almost no other piece of legislation has been subjected to as many delays as the Patient Protection and Affordable Care Act of 2010. A year ago, employers were digesting recently proposed regulations on the act's shared responsibility obligations (also known as the "employer penalty" or "pay-or-play" provisions) in anticipation of potential penalties that would begin in 2014. Those plans were delayed when the Obama Administration issued IRS Notice 2013-45 in July 2013, delaying the enforcement of the employer shared responsibility provisions until 2015. Since then, health plan sponsors and their advisors have been waiting for final regulations that will let them know how to prepare for and implement the delayed provisions. Those final regulations were finally released on February 10, 2014, and they generally adopted the approach taken under the proposed regulations, including the availability of a "look-back measurement method" to determine whether employees are "full-time" employees to whom health coverage should be offered to avoid penalties.

BACKGROUND

The ACA's shared responsibility provisions under Internal Revenue Code Section 4980H apply to employers with at least 50 full-time employees (including full-time equivalents). Code Section 4980H provides that these "applicable large employers" will be required to pay penalties if: 1) they do not provide minimum essential health coverage to substantially all of their full-time employees (and their children under age 26); and 2) at least one of their full-time employees receives a premium tax credit or cost-sharing reduction (a "subsidy") for purchasing individual coverage through a health insurance marketplace. An employer might also face a penalty if a fulltime employee receives a subsidy on a marketplace policy and the coverage offered to the employee is not "affordable" or does not provide "minimum value." For these purposes, a "full-time employee" is one who is employed to perform at least 30 hours of service per week, on average. Generally, coverage is "affordable" if the employee's share of single-only coverage does not exceed 9.5 percent of his or her household income, and a group health plan provides "minimum value" if it is designed to pay at least 60 percent of the costs incurred under the plan.

WHAT TO DO IN 2014

Now that the final employer shared responsibility regulations have been issued, employers, including state and local governmental employers, must once again take steps to determine whether they are subject to the shared responsibility provisions and, if so, to determine how they can avoid shared responsibility penalties, if they choose to do so. Employers should consider taking the following steps in 2014 in anticipation of the new effective date for ACA's shared responsibility provisions.

Step I. Determine if you are an applicable large employer subject to the employer shared responsibility provisions by counting full-time employees (including full-time equivalents) employed for at least a six-month period during 2014. If you are an applicable large employer but you have fewer than 100 full-time employees (including FTEs), determine if you can meet the eligibility criteria for an additional one-year delay. You will need to certify to the IRS that you qualify for this relief.

The shared responsibility provisions do not apply to employers with fewer than, on average, 50 full-time employees (including FTEs) on business days in the prior calendar year. Normally, this determination will be made by looking back 12 months into the prior calendar year and averaging the number of full-time employees and FTEs the employer has in each month over the 12 months. However, to determine the application of the shared responsibility provisions for 2015 only, employers need only look back into 2014 for any consecutive six-month period of their choice to determine whether they averaged fewer than 50 full-time employees (including FTEs). …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

ACA Action Steps for 2014: Another Look at the ACA's Shared Responsibility Provisions
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.