Arrested
Ignorance of the law is no excuse.

As part of a company’s annual compliance check-up, employers should now include a documentation system that verifies the full time and part time status of employees.   This is one of many new clarifications recently issued by the IRS.   The Treasury Department issued 227 new pages on February 12, 2014 as final regulations governing the “shared responsibility” for employers regarding
health coverage.   These new clarifications should be included in your company plan annual review with your consultant or broker.  To discuss how these new regulations should be addressed with your company please free to contact Van Richards at Advantage Benefit Solutions through linked in at http://www.linkedin.com/in/vanrichards  or email at van@abs-insurance.com

Here are the highlights of the final regulation:

  • In determining full-time employees for 2015, employers can use a six-month measurement period, even with a twelve-month stability period, on a one-time basis.
  • Employers can determine if they have 100 or more full-time employees or full-time equivalent employees and are subject to the employer shared responsibility requirement in 2015 by using a period of at least six consecutive months, rather than a full year.
  • The final regulations provide two methods for identifying full-time employees: the Look-back measurement method (not permitted for variable hour employees) or the Monthly measurement method (not permitted for more predictable hours of service)
  • The final regulations provide that a seasonal employee means an employee in a position for which the customary annual employment is six months or less.
  • The final regulations exempt employers with 50 to 99 employees from their application until 2016.
  • Large employers must offer coverage to at least 70% of full-time employees for the 2015 plan year, increasing to 95% for 2016 and later years.
  • The final regulations exclude both stepchildren and foster children from the definition of dependent for the shared responsibility penalty.
  • Employers with non-calendar year plan years will not be required to comply with the shared responsibility requirement until the beginning of the 2015 plan year rather than on January 1, 2015 if they satisfied certain conditions on February 9, 2014.
  • Teachers and other educational employees will not be treated as part-time simply because their school is closed or operates on a limited schedule during the summer.
  • The final regulations provide a “bright line” method for adjunct faculty.  Specific hours must be credited for hours in the classroom.
  • The regulations do provide that service performed by students under federal or state-sponsored work-study programs will not be counted in determining if the students are full-time employees. However, service performed under an internship program would count as hours of service for the outside employer and not the educational institution.
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