Health Care Law Blog
As is well known by now, transitional relief from the Patient Protection and Affordable Care Act's Employer Mandate in 2015 is available for certain applicable large employers that sponsor non-calendar year health plans. This transitional relief allows the employer to avoid penalties for those months of 2015 that predate the first day of the non-calendar plan year. What is not so well-known, however, are the requirements that must be met in order for the employer to be entitled to receive the transitional relief.
The first two conditions that must be met in order for the employer to avail itself to this transitional relief is that the employer (1) must have maintained a non-calendar year plan as of Dec. 27, 2012; and (2) must not have modified the plan year thereafter to begin at a later calendar date.
If these conditions are satisfied, then the employer may avail itself to one of three transition guidance alternatives. One of those alternatives is referred to as the "Pre-2015 eligibility transition guidance," which requires that all employees (whenever hired) must be eligible for coverage effective on the first day of the 2015 plan year under the eligibility terms of the plan in effect as of Feb. 9, 2014.
A second alternative, the "significant percentage transition guidance (all employees)," requires that the employer have, (1) as of any date in the 12 months ending on Feb. 9, 2014, covered at least 1/4 of its employees under the non-calendar year plan; or (2) offered coverage under the non-calendar year plan to 1/3 or more of its employees during the open enrollment period that ended most recently before Feb. 9, 2014.
A third alternative is the "significant percentage transition guidance (full-time employees)." It requires that the employer either (1) have, as of any date in the 12 months ending on February 9, 2014, covered at least 1/3 of its full-time employees under the non-calendar year plan; or (2) offered coverage under the non-calendar year plan to 1/2 or more of its full-time employees during the open enrollment period that ended most recently before Feb. 9, 2014.
As you can see, this transition relief is not as readily available as many people had first thought. Please contact Mindi Johnson for assistance in determining whether this transitional relief may be available to your company or to discuss any health care reform-related issues that you may be facing.
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