SOME REQUIREMENTS DELAYED FOR SMALL AND MEDIUM BUSINESSES
Senior Adviser to the Secretary, and Deputy Assistant Secretary, Mark Iwry briefed the restaurant industry on the regulations by phone Monday, highlighting the additional points of “transition relief” included in the rules, which aim to make it easier for employers to offer coverage.
The final rules issued today implement the employer shared responsibility provisions of the ACA, under section 4980H of the Internal Revenue Code. The rules include a number of changes in response to input on the proposed regulations issued in December 2012, based on input from business groups, including the National Restaurant Association. The decisions, including sections that will be phased in later in 2015, were made to help businesses adapt to the new law’s requirements, Iwry said.
Highlights of the rules include addressing questions about how plans can comply with the employer shared responsibility provisions and phasing in provisions for businesses with 50 to 99 full-time employees and those that offer coverage to most but not yet all of their full-time workers.
Employers with 50 to 99 full-time-equivalent employees won't be subject to the law’s employer-mandate penalties until 2016. Only employers with more than 100 full-time workers will be subject to fines in 2015 unless they offer coverage.
The requirement that all employers with more than 50 full-time employees provide health benefits or pay fines -- which was supposed to begin this year under the Affordable Care Act -- will not take effect until 2016.
The phase-in follows the administration’s decision last year not to impose the penalty on employers at all in 2014, a move that drew widespread criticism from political opponents of the health care law.
HOW THE POLICY AFFECTS EMPLOYERS
Larger employers with 100 or more employees (about 2% of employers): The overwhelming majority of these companies with 100 or more employees already offer quality coverage. Today’s rules phase in the percentage of full-time workers that employers need to offer coverage to from 70 percent in 2015 to 95 percent in 2016 and beyond. Employers in this category that do not meet these standards will make an employer responsibility payment for 2015.
Employers with 50 to 99 employees: Companies with 50-99 employees that do not yet provide quality, affordable health insurance to their full-time workers will report on their workers and coverage in 2015, but have until 2016 before any employer responsibility payments could apply.
According to Treasury Department officials, other provisions of the final rule:
- Make permanent the "look-back measurement method:" The final rule gives covered employers the option of using a look-back period to measure the full- or part-time status of variable-hour and seasonal employees. This measurement method can give employers more stability and predictability in knowing which employees are eligible for health care coverage under the law. The Treasury Department also clarified that seasonal employees in positions working six months or less in a year generally aren’t considered full-time employees.
- Offer transition relief for certain employer penalties: Penalty "A" will apply under the law to covered employers who fail to offer minimum essential coverage to “substantially all” of their full-time employees. For 2015, the Treasury Department says "substantially all" means employers must offer coverage to at least 70 percent of full-time employees. Starting in 2016, covered employers must offer coverage to 95 percent of their full-time employees to avoid Penalty A.
- Offer transition relief for employers with non-calendar-year health plans. For covered employers who offer non-calendar-year plans, the final rule clarifies that the employer mandate will take effect on the first day of their plan year in 2015, rather than Jan. 1, 2015.
For more information, see the Treasury Department’s fact sheet.
Still to come: The Treasury Department has not yet finalized major new reporting requirements for employers under the law. The first information reports will be required in early 2016, based on data tracked in 2015. The NRA reiterated its concern that these rules be as streamlined as possible, because these could contain significant compliance costs for restaurants.
The California Restaurant Association (CRA) will continue analyze the regulations and provide updates on how the rules will affect restaurants.