Date: Feb 10, 2014
The Treasury Department

The Treasury Department announced today more changes to the large employer mandate.  The mandate requires employers with 50 or more full time equivalent employees (“employees”) to offer health benefits to full-time employees or face potential tax penalties (smaller employers are not subject to the mandate). The mandate was set to begin January 1, 2014.  The Obama Administration previously delayed the mandate in the summer of 2013 until 2015. 

Today’s change provides relief until 2016 from the mandate for medium-sized employers with 50-99 employees.  The announcement also eases the mandate’s burden on larger employers with 100 or more employees.  These larger employers are subject to the mandate in 2015, but the mandate’s requirements are relaxed as explained below.

Mandate Delayed to 2016 for Medium Sized Employers That Provide Certification

Employers with 50-99 employees get one more year of relief and will not be required to comply with the mandate until 2016 as long as they certify with the federal government that they are not cutting back on positions to avoid the mandate.  Western Growers will provide more information on the certification process soon.   

Purportedly, the certification process is required to prevent employers from gaming the system and dropping coverage.

Relief for Employers With 100 or More Workers: Offer of Coverage Reduced From 95% to 70%

Prior regulation required large employers to offer coverage to 95% of their full-time employees.  The Obama Administration today is relaxing this requirement.  In 2015, employers with 100 or more employees will be in compliance with the mandate if they offer 70% of their full-time employees the opportunity to enroll in health coverage.  The relaxing of the mandate is only temporary and by 2016 these larger employers must meet the 95% requirement. 

WG Staff Contact

Jonathan Alexander
Vice President & PCMI Compliance

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