EUCLID MANAGERS®
has served the independent agent
since 1976, offering a portfolio
of group health, professional
liability, individual life, health,
annuity and long-term
care products.
We proudly represent many
fine carriers including
Group Products:
UnitedHealthcare of Illinois
Delta Dental of Illinois
MetLife
Concierge Services:
LifeLock
HealthiestYou
Individual Products:
American General Life Companies
AXA/Equitable
Banner Life
Delta Dental of Illinois
Genworth Financial Insurance Co.
Guarantee Trust Life
Humana Individual
John Hancock Life
Lincoln National Life
Prudential Financial
Transamerica
West Coast Life
…and many more!
Shared Responsibility for Employers - Final Rules
The Internal Revenue Service gave employers an early St. Valentine’s Day gift
with the final PPACA employer responsibility rules – the employer mandate –
issued in February. This issue of Reflections provides an overview of some of
the key changes in the final rules.
Employer Responsibility – A Review
The interim rules issued more than one year ago provided many answers to
employers grappling with complying with the Patient Protection and
continued on page 2
A letter from Karen Knippen
I ended last month’s letter with: “I must say I’m looking forward to a
day when I feel like we actually know all of the tidbits and idiosyncrasies.
In the meantime, all we can do is our best.” Is it okay to say “ditto”? It
seems like the rules for PPACA are written in sand on the beach – one
wave and ....
But, mid-size employers are getting a reprieve for which many will be glad.
That is, until they have to come into full compliance later.
Contact Information
234 Spring Lake Drive
Itasca, Illinois 60143
Phone: (630) 238-1900
Outside Chicagoland:
(800) 345-7868
Fax: (630) 773-8790
Visit us at:
www.euclidmanagers.com
Sincerely yours,
Karen Knippen, RHU, REBC, CLTC
EUCLID MANAGERS® has been serving the independent agent since 1976 with a portfolio of group health, professional
liability and individual life and health, annuity and long-term care products. We proudly represent UnitedHealthcare,
Delta Dental of Illinois, MetLife and Humana Individual. We encourage your feedback and suggestions. Please call
your EUCLID MANAGERS® Marketing Representative or Marcy Graefen at (630) 238-2915 for more information. Outside
Chicagoland, call (800) 345-7868. Website: www.euclidmanagers.com
Affordable Care Act (PPACA). These final rules were
highly anticipated in light of the earlier decision to
delay the penalties and reporting provisions
for large employers.
As a result of the delay, many employers employing 50
full-time employees or a combination of full-time and
part-time employees that is equivalent to 50 full-time
employees will be subject to the requirements of the
Employer Shared Responsibility provisions beginning in
2015 and after.
Special Delay for Mid-Size Employers
Employers with 50 to 99 full-time equivalent
employees may qualify for delayed compliance
until plan years beginning in 2016. Employers of
this size will not be subject to penalties if they meet
the following conditions:
• The employer must employ on average at least 50
full-time equivalent employees but fewer than 100
on business days during 2014
• During the period beginning on February 9, 2014
and ending on December 31, 2014, the employer
may not reduce the size of its workforce or the
overall hours of service of its employees to qualify
for transition relief
• During the period of February 9, 2014 and ending
on December 31, 2015 (or the last day of the 2015
plan year) the employer may not eliminate or
materially reduce the health coverage offered on
February 9, 2014.
• Employers must provide a certification that they
have met these requirements.
-2-
Reflections
An employer will not be treated as materially reducing
coverage if:
• It continues to offer each employee who is eligible
for coverage an employer contribution toward the
cost of employee-only coverage that either
~ Is at least 95% of the dollar amount
contributed for coverage by the employer on
February 9, 2014 or
~ Is at least the same percentage of the cost of
coverage that the employer was offering to
contribute to coverage on February 9, 2014
• If benefits change under the employee-only
coverage offered, the coverage must provide
minimum value after the change
• The terms of the group health plan cannot be
changed to narrow or reduce the class or classes
of employees (or the employees’ dependents) to
whom coverage was offered under the plan as of
February 9, 2014.
This transition relief is also available to new employers
who were not in existence on any business day in 2014.
It remains unclear whether an existing employer who
did not offer coverage in 2014 is eligible for this
transition relief.
In some cases, employers may make changes based on
business-related purposes and still qualify for transition
relief. In such cases, the business reason should be
well-documented and legal advice may be advisable.
Employers may measure the number of employees
during any consecutive six (6) month period – chosen
by the employer – during 2014 to assess whether it
meets the definition of an “applicable large employer”,
i.e., with 50 or more full-time equivalent employees.
Seasonal Employees
The final rules define seasonal employees as positions
for which customary annual employment is six (6)
months or less generally. As such, they are not
considered to be full-time employees.
Short Term Employees
Many employers have employees that are hired to
work for a specific period of time, usually tied to
a project or other limited need situation. The final
regulations specifically state that such short term
workers are treated no differently than other workers.
In fact, the rules state that an employer may not take
into account the likelihood that the employee’s
employment will terminate before the end of the
initial measurement period.
Dependent Definition Changed
The rule that allows employers to disregard seasonal
employees when determining whether an employer is
an “applicable large employer” if the employees in
excess of 50 for no more than 120 days or four (4)
calendar months were seasonal employees is also
contained in the final rules.
Temporary Staffing Firms
The final rules provide added guidance on temporary
staffing firms. Staffing firms are to consider several
factors to determine if an employee is a variable hour
employee. These include:
• Whether other employees in the same position
with the staffing firm, as part of their continuing
employment have the right to decline temporary
placements the firm offers to employees
• Whether the employees typically have periods
where they have no assignments
• Whether the assignments are typically for
different periods of time
The final rules redefine the definition of dependent.
The rules remove step-children and foster children from
the definition.
Conclusion
There are a number of other provisions in the final
rules that affect large employers. Presumably many
of these provisions will also affect employers with
50-99 full-time equivalents once they are fully
exposed to the requirements of the Shared
Responsibility Requirements. However, with the
delay to 2016, there is plenty of opportunity for
compliance concerns or more administrative changes
or delays.
The final rules also address issues of concern to
educational institutions, those with student workers
and volunteers. There is also more transition relief for
larger employees. One of note is an increase in the
number of employees to disregard when calculating
the penalty for not offering coverage from 30 to 80.
• Typical placements do not exceed 13 weeks.
Reflections
-3-
A service publication for brokers from
Euclid Managers®, proudly representing
UnitedHealthcare of Illinois, Delta Dental of Illinois,
MetLife and Humana Individual.
HealthiestYou and Lifelock available through Euclid Managers Concierge Services.
Visit us online www.euclidmanagers.com.
Legislative Review is published by Euclid Managers®, 234 Spring Lake Drive., Itasca, IL 60143. For more information, contact your Marketing Representative or Marcy Graefen
at (630) 238-2915 or fax your request to (630) 773-8790. Outside Chicagoland: (800) 345-7868, Fax (877) 444-2250. © Permission to quote with credit to source.
Shared Responsibility for
Employers - Final Rules
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