ppaca: legal

May 22, 2013

Addie Prewi)

Legal Update

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

Office: 225.381.0281 Email: addie.prewi:@taylorpoter.com

3 Office: 225.381.0281 Email: addie.prewi:@taylorpoter.com

When must I decide to pay or play?

•  Penalties effective on January 1, 2014 unless qualify for certain transitional relief for "scal 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.

•  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


Who is full-time for penalty?

•  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


What period used for full-time?

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


What period used for full-time?


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.

Plan Year

Transitional measurement period

Administrative 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


Examples of 2014 transitional relief


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 "rst measurement period, subsequent measurement periods for ongoing employees, and initial measurement periods for variable or seasonal employees.


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.

Thank you Addie Prewi)

Attorney, Taylor Porter Tax & Health Care Practice Team [email protected]

225.381.0281

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