2. 2
Do I Pay or Play?
• To play, offer minimum essential coverage to
substantially all full-time employees.
• Must pay if:
1. Don’t offer coverage – pay $2,000 annually per
full-time employee over 30 full-time employees.
2. Offer unaffordable coverage or coverage that
lacks minimum value – pay $3,000 annually per
full-time subsidized employee
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3. 3
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When must I decide to pay or play?
• Penalties effective on January 1, 2014 unless
qualify for certain transitional relief for fiscal
years plans.
• However, employers must know by October
1, 2013, whether they will pay or play in
order to issue required notices to all
employees regarding coverage options and
exchanges.
• See https://www.dol.gov/ebsa/healthreform/index.html for
technical release and model notices.
4. • Employee that works more than 30 hours
per week or 130 hours per month is a full-
time employee
• Part-time/full-time equivalent employees
irrelevant for calculating penalty; ONLY used
to determine if an applicable large employer
4
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Who is full-time for penalty?
5. • Actual hours worked
• Safe-harbor measurement period
o Measurement or look-back period – measure
(on average) whether employees are full-time
or not
o Administrative period – identify and enroll full-
time employees
o Stability period – penalty may be due for
employees found to be full-time during
measurement period
5
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What period used for full-time?
6. Measurement
Period
Administrative
Period
Stability
Period
On-going
employees
3 to 12 months
Up to 90 days
At least 6 months
but not shorter than
measurement period
New employees
hired as full-time
N/A
Up to 90 days to
enroll
N/A
New variable hour
and seasonal
employees
3 to 12 months
Up to 90 days but
measurement and
admin period cannot
exceed 13 months
3 to 12 months but
not longer than
measurement period
6
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225.381.0281
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What period used for full-time?
7. 7
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Transition relief in 2014
• For 2014, employers can use a transitional measurement period
that is shorter than the stability period for determining full-time
employees if the following requirements are met:
1. The measurement period is at least 6, but less than 12 months,
2. The measurement period begins on or before July 1, 2013, and
3. The measurement period ends no sooner than 90 days before
the beginning of the employer’s 2014 plan year.
• For fiscal year-plans, the transitional relief effectively delays the
first date on which the employer can be subject to a penalty to the
first day of the fiscal year plan in 2014.
8. Plan Year
Transitional
measurement
period
Administrativ
e period
Stability
period
Calendar year
April 15, 2013 –
Oct. 14, 2013
Oct. 15, 2013 –
Dec. 31, 2013
Jan. 1, 2014 – Dec.
31, 2014
Calendar year
May 15, 2013 – Oct.
14, 2013
Nov. 15, 2013 –
Dec. 31, 2014
Jan. 1, 2014 – Dec.
31, 2014
FY beginning April
1, 2014
July 1, 2013 – Dec.
31, 2013
Jan. 1, 2014 – March
31, 2014
April 1, 2014 –
March 31, 2015
FY beginning
July 1, 2014
June 15, 2013 –
April 14, 2014
April 15, 2014 –
June 30, 2014
July 1, 2014 – July 1,
2015
FY beginning Nov.
1, 2014
Sept. 1, 2014 – Oct.
31, 2014
Sept. 1, 2014 – Oct.
31, 2014
Nov. 1, 2014 – Nov.
1, 2015
8
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Examples of 2014 transitional relief
9. 9
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Next steps for employers
• Work with the payroll department to ensure an appropriate
system is in place to track the numbers of hours for
determining and substantiating employee’s status as full-time
or less than full-time.
• Consider the timelines to adopt for the first measurement
period, subsequent measurement periods for ongoing
employees, and initial measurement periods for variable or
seasonal employees.
10. 10
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225.381.0281
Email:
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Circular 230 disclosure and disclaimer
Any tax advice contained in this communication is not intended
and cannot be used by any taxpayer to avoid penalties under the
Internal Revenue Code or Treasury Regulations.
This is provided for educational and informational purpose only
and should not be considered legal or accounting advice. You
should consult with legal counsel and accountants for their
interpretation of the applicable law, rules, regulations, guidance
and consideration of other relevant facts before acting on any
information contained herein.
11. Thank you
Addie
Prewi)
Attorney, Taylor Porter
Tax Health Care Practice Team
addie.prewitt@taylorporter.com
225.381.0281
