Last summer the IRS issued Notice 2013 – 45, which delayed enforcement of Employer Shared Responsibility (§4980H) reporting and penalties until 2015. To date, the IRS has not indicated whether the delay was until January 1, 2015, or upon the employer’s medical plan renewal date in 2015. We have contacted the IRS for guidance, but have yet to receive clarification. Employers with calendar year plans must be compliant as of January 1, 2015. Pending new information, we recommend that employers subject to §4980H with non – calendar year plans operate as if the mandate will be effective January 1, 2015.
Under §4980H, employers that averaged 50 or more full – time equivalent employees in a prior calendar year are required to offer minimum value, affordable medical coverage to employees working at least 30 hours per week, or face potential penalties. A penalty will only be assessed if a full – time employee is not offered coverage and enrolls in the Health Insurance Marketplace with a federal subsidy. If an employer does not offer coverage to at least 95% of its full – time employees, the §4980H(a) penalty is assessed based on the number of full – time employees (less the first 30) multiplied by $167 per month. If coverage is not minimum value and/or affordable, the §4980H(b) penalty is assessed at $250 per month employed for each full – time employee receiving a federal subsidy.
Employers are not subject to any penalties under §4980H during a full – time employee’s first three calendar months of employment. A calendar month includes any month in which the employee was employed, even if only for one day.