As expected, the House of Representatives approved legislation on Thursday that would change the definition of “full-time employee” under the Affordable Care Act. Under the healthcare law’s employer responsibility requirements, an employer with 50 or more full-time or full-time equivalent employees will be required to provide health insurance that meets certain ACA standards to their full-time employees starting in 2015, or pay a penalty. The ACA considers a worker “full time” if he or she works 30 hours or more per week, instead of the customary 40 per week. The Save American Workers Act (H.R. 2575) would specifically define “full-time employee” as an employee, “with respect to any month . . . who is employed on average at least 40 hours of service per week.’’ The measure was approved by a vote of 248-179, with 18 Democratic lawmakers joining all Republicans in support of the bill.
Articles about the Employee Retirement Income Security Act (ERISA) and other issues relating to employee benefit topics
HHS Releases Security Risk Assessment Tool to Help Providers with HIPAA Compliance
On March 28, 2014, the U.S. Department of Health and Human Services launched a new security risk assessment (SRA) tool to help health care providers in small- to medium-sized offices conduct risk assessments of their organizations in order to comply with the Health Insurance Portability and Accountability Act (HIPAA) Security Rule.
Legal Alert: Supreme Court Decides Severance Not Exempt from FICA
Executive Summary: On March 25, 2014, the United States Supreme Court unanimously held that certain severance payments (described as “supplemental unemployment compensation benefits” or “SUBs”) constituted taxable wages for purposes of FICA. See United States v. Quality Stores, Inc. No. 12-1408 (2014). The Sixth Circuit had held that the payments were not wages subject to FICA, in a decision from which the IRS appealed. See In re Quality Stores, Inc., 693 F. 3d 605 (6th Cir. 2012).
Tax Alert: US Supreme Court Rules Severance Pay Subject to FICA Taxes
This week, the U.S. Supreme Court confirmed that severance pay is subject to FICA tax.
Navigating a New Era of Health Care
As physicians search for new revenue streams in response to declining reimbursement and additional administrative complexity, a new law passed in 2013 should provide added flexibility and time to expand practices through the use of physician assistants. The health care markets continue to realign as the Affordable Care Act is implemented and if all goes as planned, there will be more patients.
IRS Issues Final Employer ACA Reporting Rules
Despite the many Affordable Care Act (ACA) implementation delays, rules governing the healthcare law’s various provisions have not stopped coming. On Wednesday, the IRS released two new rules related to ACA employer reporting requirements. The first rule, Information Reporting by Applicable Large Employers on Health Insurance Coverage Offered Under Employer-Sponsored Plans, implements the information reporting requirements under § 6056 of the Internal Revenue Code (IRC), while the second rule, Information Reporting of Minimum Essential Coverage, implements the requirements imposed by IRC § 6055. These reporting requirements become effective with respect to the 2015 calendar year.
IRS Final Rule Partially Delays ACA Employer Shared Responsibility Requirement
On January 10, 2014, the Internal Revenue Service (IRS) released final regulations governing the employer shared responsibility provisions of the Affordable Care Act (ACA).1 The final rule addresses application of the so-called “play or pay” requirement that was added by the ACA. Under this requirement, employers with 50 or more full-time employees (as such term is defined in the rules) must offer health coverage to full-time employees and their dependents or pay a penalty. Even employers that offer coverage may incur a penalty if that coverage does not provide “minimum value” to plan participants or if it is not “affordable.” Originally slated to become effective in 2014, the IRS had previously delayed the effective date of the employer responsibility provision until 2015. The long-awaited final rule further delays the effective date for employers with between 50 and 99 full-time employers until 2016. The final rule also provides that employers with 100 or more full-time employees must offer health coverage to only 70% of full-time employees in 2015, instead of 95%. The delay is certainly welcome news for employers and provides some much-needed clarity. Nonetheless, the final rule calls upon employers to make critical decisions in the months ahead as uncertainty about the play-or-pay requirement remains.
Agencies Issue Rules Related to 90-day Limitations Period under ACA
The federal agencies charged with implementing provisions of the Affordable Care Act (ACA) have issued a final rule that implements the 90-day limit on waiting periods for obtaining health coverage. The ACA prohibits group health plans and group health insurance issuers from imposing a waiting period that exceeds 90 days after an employee is otherwise eligible for health coverage. A “waiting period” is defined as the period that must pass before coverage for an individual who is otherwise eligible to enroll under the terms of a group health plan can become effective. The final rule establishes the guidelines governing the relationship between a plan’s eligibility criteria and the 90-day waiting period limitation.
Legal Alert: Final Regulations on Affordable Care Act’s Employer Mandate Issued – Part 1
Executive Summary: Under final regulations issued by the U.S. Treasury Department on February 10, 2014, employers with at least 50 but fewer than 100 employees will not be required to comply with the employer shared responsibility provision of the Affordable Care Act (ACA) until January 1, 2016. Employers with at least 100 employees will be required to comply with this provision beginning January 1, 2015.
IRS Issues Final ACA Employer Mandate Rule
The Internal Revenue Service has released the long-awaited final rule implementing the employer shared responsibility (the “pay-or-play” employer mandate) provisions of the Affordable Care Act (ACA). Generally, this mandate will require employers with 50 or more full-time and full-time equivalent employees to either offer employees and their dependents health coverage that meets affordability and “minimum value” requirements, or pay a penalty. The final rule includes some notable changes from the initial proposal. In particular, the final rule offers a compliance phase-in for employers.
House Committee Advances Bills Addressing Definition of Full-Time Employee under ACA
On February 4 the House Ways and Means Committee approved two bills that address the definition of “full-time employee” under the Affordable Care Act. Under the healthcare law’s employer responsibility requirements – commonly known as the “pay-or-play” provisions – an employer with 50 or more full-time or full-time equivalent employees will be required to provide health insurance that meets certain ACA standards to their full-time employees starting in 2015, or pay a penalty. The ACA considers a worker “full time” if he or she works 30 hours or more per week, as opposed to the customary 40 hours used in other employment statutes and regulations.
ACA Will Cause Loss of Two Million Full-Time Jobs, According to CBO Report
Today, the Congressional Budget Office (CBO) issued an updated report on the Affordable Care Act’s (ACA) impact on the labor market and insurance coverage. In its February 2014 budget outlook, CBO estimates that the ACA could lead to a loss of about two million full-time equivalent jobs in 2017, rising to about 2.5 million in 2024.1 Although the CBO projects that total employment (and compensation) will increase over the coming decade, that increase will be smaller than it would have been in the absence of the ACA. According to the CBO, the decline in full-time equivalent employment stemming from the ACA will consist of some people not being employed at all, and other people working fewer hours. This is a substantial increase from its prior 2010 projection. The CBO previously estimated that the ACA would reduce household employment in 2021 by about 800,000 individuals. The CBO’s current estimate for 2021 is a reduction in full-time equivalent employment of about 2.3 million individuals.
Supreme Court Enjoins Federal Government From Enforcing Birth Control Mandate As to Religious Institutions
On New Year’s Eve 2013, Supreme Court Justice Sonia Sotomayor—who acts as the “Circuit Justice” to the U.S. Court of Appeals for the 10th Circuit —temporarily enjoined the imposition of a federal mandate that certain religious employers either (1) provide insurance coverage including birth control to their employees; or (2) sign and execute a form allowing a third party to provide that coverage to their employees. After weeks of speculation as to whether the injunction would soon be lifted, the full Court issued its ruling on January 24, 2013, holding that the injunction would continue during the pendency of a federal lawsuit in the District Court for the District of Colorado.
Fifth Circuit: Employee Who Violated Noncompete Portion of ERISA Plan Not Entitled to Benefits
On January 10, 2014, the U.S. Court of Appeals for the Fifth Circuit affirmed a lower court’s determination that an employer properly denied a former employee’s request for benefits because he violated the noncompete portion of his Employee Retirement Income Security Act (ERISA) plan.
Workplace Policy Institute: A Look Ahead to Legislative and Regulatory Changes in 2014
The government is divided, congressional midterm elections are looming, and the President is approaching “lame duck” status. Although this political landscape may lead employers to assume that 2014 will be a quiet year on the legislative and regulatory front, the year ahead is shaping up to bring significant changes to workplace policy at the federal as well as state and local levels. The year began with President Obama announcing a renewed focus on income inequality.1 Pushes to increase the minimum wage and extend unemployment benefits are clear examples of this agenda. Yet other, less obvious, legislative and regulatory proposals impacting employers may well accompany the focus on income inequality. With Congress effectively deadlocked by a Republican-controlled House and a Democrat-controlled Senate, the administration will look past Congress to advance its agenda. At the same time, states will continue to look past Washington to enact changes in workplace policy. Accordingly, 2014 looks to be anything but quiet with respect to employment, labor, and benefits policy. Amidst the specter of the Affordable Care Act (ACA) implementation, employers should prepare for new requirements coming from Washington and around the country.