BTerrell Group Blog

It’s hard to believe it’s been over two years since the Obama administration temporarily put the brakes on certain parts of the Affordable Care Act’s employer shared responsibility provisions (known informally as the ”play-or-pay” rules), which subject employers with 50 or more full-time employees to potential penalties for the failure to offer adequate and affordable health coverage.

Originally scheduled to go in to effect in 2014, enforcement of the play-or-pay provisions was delayed for a year for employers with 100 or more full-time employees, and for two years for employers with more than 50 full-time employees. But this transition period is almost over, and as of January 2016, the play-or-pay rules will be in full effect.

Of course, employers with 100 or more full-time employees have been subject to play-or-pay since January 2015. However, two important rules regarding coverage and calculation of the penalty were "loosened" by the administration to help ease the transition for these groups, and it's important to be aware that the "loosening" of these rules will expire effective January 2016. This means that after the 2015 plan year is over, all employers with 50 or more full-time employees (i.e. employees working at least 30 hours a week and including part-time employees, who must be counted on a pro-rata basis) will now be subject to the full brunt of the play-or-pay rules. 

Here is a summary of the rules as of 2016:

1. Carriers (and employers offering self-insured coverage), as well as employers already subject to the play-or-pay rules for 2015, must comply with the Form 1094 and 1095 reporting requirements for purposes of reporting health coverage as well as the offering of such coverage.  
2. All employers with 50 or more full-time employees must offer adequate and affordable (generally, costing an employee no more than 9.5% of his or her income) health coverage to at least 95% of those employees. The failure to do so could result in substantial penalties if any otherwise eligible employee obtains subsidized coverage on a healthcare exchange.
3. Employers that, because of the transition period, were not yet subject to the play-or-pay rules but will be subject to them in 2016, should already have been taking steps to classify their employees into “full-time” or “non-full-time” this year for purposes of eligibility determination.
4. Employers with 50 or more full-time employees must file 1094-C and 1095-C reports with the IRS outlining whether coverage was offered, and to whom.

In short, employers—especially those in the 50-100 full-time employee range—are facing major changes in terms of how they must deliver health benefits over the next few months. Now more than ever, we urge you to contact Ameriflex for an evaluation of your clients' compliance with these rules. In addition to providing clarification on the new requirements, Ameriflex can help you with the arduous monitoring and reporting requirements around the law.  

Workforce Go!, offering bi-synchronous integration between Intacct and Ameriflex Workforce Management Solution is a collaboration between BTerrell Group and Ameriflex. With Workforce Go! Customers benefit from a more fully integrated Payroll and HRMS solution for Intacct than available with any other product.

By Brian Terrell of BTerrell Group, LLP, Intacct and Sage ERP & CRM provider based in Dallas.