Final regulations issued on February 12, 2014 contain significant new relief from the employer mandate’s shared responsibility penalty under the Patient Protection and Affordable Care Act for 2015. Previous guidance delayed application of the employer penalty from 2014 to 2015.

Under this new relief, employers with 100 or more full-time employees (including full-time equivalents) in 2014 will have to pay the employer shared responsibility penalty for 2015 (and for non-calendar-year plans, any calendar months during the 2015 plan year that fall in 2016), only if the employer:

After 2015, 95% will be substituted for 70% above, as originally provided in the employer mandate rules.

In addition, employers with at least 50 but fewer than 100 full-time employees (including full-time equivalents) in 2014 will not have to pay the employer shared responsibility penalty for 2015 (and for non-calendar-year plans, any calendar months during the 2015 plan year that fall in 2016) if the employer:

The employer mandate does not apply to employers with fewer than 50 full-time employees (including full-time equivalents). For more information on the employer mandate and the employer shared responsibility penalty, see our previous articles Employer Responsibility – Will You Pay or Play? and Employer Responsibility – Will You Pay or Play? Part II, or contact a member of our Employee Benefits Group.

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