ATLANTA — The "play or pay" requirements under the Affordable Care Act aren't changing, but the White House, Treasury and IRS this week announced delays for these employer responsibility provisions, giving two groups of employers extra time to cover their workers.
The play or pay rule states that employers with more than 50 full-time equivalent employees must provide affordable healthcare coverage to full-time employees or pay a penalty of $2,000 per each FTE.
For employers of 50 to 100, IRS changes now waive the penalties associated with the play or pay requirement back, originally slated for 2014, to 2016. For employers of 101 and more, previous IRS changes waived the penalties associated with the requirement back, originally slated for 2014, to 2015. The concession being granted to this group for 2015 is that instead of having to cover at least 95% of FTEs or pay a fine, that percentage is changed to 70%, but only for 2015.
"The government is just allowing transition relief — more time for certain employers to comply — in that they won't enforce the penalties associated with play or pay or have modified when the penalties apply," said Annette Bechtold, SVP of regulatory affairs and reform initiatives for Digital Insurance, a health benefits advisory firm. "In 2013, the departments communicated that penalties would not be enforced for 2014. This notice now addresses 2015."
Bechtold added that the first day of the year a rule takes effect may not be the one for all employers must pay attention to. "If the employer has a non-calendar year plan, they will not be required to comply until the first day of their plan year."
Bechtold said the delays are a result of the IRS taking an entire year to finalize the proposed rules that were issued Jan. 2, 2013. "That didn't give employers ample time for recordkeeping and to comply."
