Non-Calendar Year Plans
Large employers with non-calendar year plans do not have to provide coverage until the start of the 2015 plan year, but the plan year effective date applies only if they meet a number of requirements. The most significant of these are:
- The employer had a group health plan in place on December 27, 2012.
- The employer has not changed the plan year since December 27, 2012, (this means that most plans that opted for early renewal are not eligible for this delay).
- Affordable, minimum value coverage is offered to most (70%) employees as of the start of the 2015 plan year and most employees were eligible under the rules in place on February 9, 2014.
- Affordable, minimum value coverage is offered to most (70%) employees as of the start of the 2015 plan year and although most employees were not eligible under the rules in place on February 9, 2014, on at least one day during the period from February 10, 2013, through February 9, 2014, either:
- One-quarter of its full-time employees were covered by a group health plan sponsored by the employer, or
- Coverage was offered to at least one-third of its full-time employees during the open enrollment period that ended most recently before February 9, 2014.
Non-calendar year plans will be required to provide reporting on a calendar year basis.
Next Steps
Each year all employers will need to determine whether they are large enough for the play or pay requirements to apply in the following year. When making this determination, it’s important to make sure all common-law employees are counted and that all employees in a family of companies are added together. While an employer has the option of using a six consecutive month period in 2014 to determine if it has enough full-time or full-time equivalent employees to be considered “large,” it seems unlikely that this option will be carried over for later years. Employers should be prepared to track hours for all of 2015.
Employers with 100 or more full-time or full-time equivalent employees need to determine how they will count employees’ hours in 2015. Employers with calendar year plans that choose to use the look-back/measurement and stability period approach will need to begin tracking hours no later than July 1, 2014, and will need to begin this sooner if they wish to use an administrative period. Detailed, updated information on how to use the look-back option will be provided by the end of February.
Employers with 50 or more full-time or full-time equivalent employees need to determine how they will count employees’ hours in 2016. Employers that choose to use the look-back/measurement and stability period approach will probably need to begin tracking hours no later than January 1, 2015, and will need to begin this sooner if they wish to use an administrative period. Employers with 50-99 employees also need to make sure that they can meet, and continue to meet, the requirements that must be met to delay compliance to 2016.
If you would like a White Paper outlining the recent clarifications, please request one here.
