Employer Reporting 101: Groups Under 100 Full-Time Employees

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Under the final regulations, ALEs that have fewer than 100 full-time employees (including FTEs) generally have until 2016, to comply with the pay or play rules. This delay applies for all calendar months of 2015 plus any calendar months of 2016 that fall within the 2015 plan year. However, ALEs that change their plan year after Feb. 9, 2014, to begin on a later calendar date were not eligible for the delay. In addition, an ALE must certify that it meets the following three eligibility conditions to qualify for the delay:

  • The employer must employ a limited workforce of at least 50 full-time employees (including FTEs) but fewer than 100 full-time employees (including FTEs) on business days during 2014.
  • Between Feb. 9, 2014, and Dec. 31, 2014, the employer may not reduce its workforce size or overall hours of service of its employees in order to satisfy the limited workforce size condition.
  • During the coverage maintenance period (that is, the period ending Dec. 31, 2015, or the last day of the plan year that begins in 2015), the employer may not eliminate or materially reduce the health coverage, if any, it offered as of Feb. 9, 2014.

An ALE that qualifies for this additional one year delay will have to comply with the pay or play rules beginning on Jan. 1, 2016, at the earliest. However, an ALE that qualifies for this delay and has a non-calendar year plan may not have to comply until the beginning of their 2016 plan year. In most cases, to prepare for compliance, ALEs that intend to use the look-back measurement will also need to begin tracking their employees’ hours of service in 2014 to have corresponding stability periods for 2016. A transition measurement period is not available in 2015.

Employers that have calendar year plans and want to use a 12-month standard measurement period (and, in turn, a 12-month stability period) will have to begin measuring their employees’ hours of service no later than Jan. 1, 2015. However, an employer that wants to take advantage of an administrative period would have to begin measuring its employees’ hours of service at some point in 2014 (depending on the length of the administrative period).

For example, for the 2016 plan year, an employer that has a calendar year plan and is using a 90-day administrative period would have to begin the standard measurement period on Oct. 3, 2014 and the administrative period on Oct. 3, 2015.

Because this delay applies for all calendar months of 2015 plus any calendar months of 2016 that fall within the 2015 plan year, an ALE that has a non-calendar year plan may not have to comply with the pay or play rules until the beginning of their 2016 plan year, as long as it continues to meet the eligibility conditions for the additional one year delay for its entire 2015 plan year.

Thus, medium-sized ALEs that have non-calendar year plans may have some additional time before they need to begin tracking employees’ hours of service. For example, an employer with a plan year beginning April 1 that is using a 90-day administrative period may use a measurement period from Jan. 1, 2015, through Dec. 31, 2015 (12 months), followed by an administrative period ending on March 31, 2016.

AUI Can Help

Have we completely confused you?  Fortunately, we have compliance experts that can walk you through this process.  If you have questions, please contact Alice Rhodes at arhodes@auiinfo.com or your AUI agent.

We also have tools to help you keep track of employee hours including free resources for our AUI clients as well as add-on services to payroll and reporting.

2019-03-07T20:31:19-05:00
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