Academic journal article Journal of Accountancy

IRS Delays Health Coverage Mandate Another Year for Midsize Employers

Academic journal article Journal of Accountancy

IRS Delays Health Coverage Mandate Another Year for Midsize Employers

Article excerpt

The IRS in February delayed the so-called shared-responsibility requirement under Sec. 4980H for employers who have 50 to 99 full-time-equivalent employees (FTEs) in 2014. These employers will now have until 2016 to offer health care coverage to their employees or be subject to the shared-responsibility penalty. However, these employers will still be required to report on their workers and health care coverage in 2015, for which the IRS separately issued final regulations providing for simplified methods (see next item).

The delay was part of final regulations under Sec. 4980H that also provided other significant transition relief and revisions of proposed regulations. The final regulations also contain transition guidance for noncalendar-year plans.

Last July, in Notice 2013-45, the IRS postponed the Sec. 4980H shared-responsibility penalty to 2015. (Its original effective date was 2014.) The final regulations further delay the penalty for one year for midsize employers. To be eligible for the delay, employers must not reduce their workforce or hours of service to qualify and must maintain their previously offered health coverage. …

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