The final shared responsibility regulations under the Affordable Care Act, issued earlier this month, in large part maintain the rules set forth in the proposed regulations.  However, there are several ways in which the final regulations modify or clarify these rules.  Below is a top ten list (which we’re sure David Letterman would use if he were a benefits lawyer) of things to know about the final regulations.

The rules govern the requirement that employers with at least 50 full-time employees could owe a “shared responsibility” excise tax if they fail to offer group health coverage.  One penalty (known as the “A” penalty) applies if an employer fails to offer group health coverage to 95% of its employees on every day of a month and at least one employee purchases coverage through an exchange with a federal subsidy; the “A” penalty each month is an excise tax of 1/12 of $2,000 for each full-time employee in excess of 30.  Even if the employer meets the 95% test, a separate penalty (known as the “B” penalty) applies if the employer fails to offer affordable health coverage to an employee, and the employee purchases coverage through an exchange with a federal subsidy; the “B” penalty each month is an excise tax of 1/12 of $3,000 per each such employee who actually purchases coverage through an exchange with a federal subsidy.  A “full-time employee” is a common-law employee who works an average of at least 30 hours per week. (You will find a more detailed description of the shared responsibility rules here and here.)

Below are our top 10 highlights of the final regulations:
Continue Reading Top Ten Things to Know about the Final Shared Responsibility Regulations

The Affordable Care Act’s “pay or play” mandate goes into effect starting in 2014.  Under the mandate, large employers (employers with 50 or more full-time employees) must either provide health coverage to their employees or pay an excise tax.  The chart below shows when the “pay or play” penalty applies and how to calculate the

Starting in 2014, large employers will have to pay a “shared responsibility” excise tax up to $3,000 per employee if they fail to provide affordable health coverage to full-time employees and their dependents.  The Treasury Department and IRS have published a proposed regulation and frequently-asked questions that make important changes in prior guidance. 
Continue Reading IRS Proposes Shared Responsibility Tax Rules for Employers