Medium-Sized Employers (50–99 Employees)
The delay of the employer mandate applies to medium-sized employers, defined as firms with 50-99 full-time equivalents (FTEs), and has been postponed until 2016. These employers will still have to report on the insurance status of their full-time workers in 2015; however a penalty will not be imposed on the business regardless of coverage being offered or affordable. This reporting remains in place for purposes of evaluating whether or not an individual maintains coverage, which is still a requirement under the Affordable Care Act (ACA) and applicable to this year.
Large Employers (100+ Employees)
Large employers, defined as firms with 100 or more FTEs, were also impacted by this notice. Prior to yesterday’s announcement, large employers were expected to offer coverage to 95% of their full-time workers by 2015. This percentage has now been reduced to 70% of full-time workers in 2015 and then increases to 95% for future years.
Employers with non-calendar year plans (plan years that do not start on January 1st) will be able to begin compliance with Employer Shared Responsibility at the start of their plan years rather than on January 1, 2015. This applies to Employer groups that maintained non-calendar year plans as of December 27, 2012. This allows an Employer with 100 or more employees who has a May 1st renewal date an extra four months to comply.
The notice also includes information for seasonal employees and how they are viewed in the workplace. As defined by the health reform law, a seasonal employee is an individual that is employed for 120 days or less. Although temporary, it was proposed that these employees were to be included when determining employer size. As per yesterday’s notice, seasonal employees may now be excluded from the count if they cause an employer to exceed the FTE threshold for less than 120 days during the calendar year. Further, a temporary employee that exceeds 120 days can still be classified as a seasonal employee if they maintain a customary annual employment schedule of less than six (6) months that regularly begins and ends at the same time of year.