By Greg Cushard

The final regulations – not the last word on the play or pay mandate, to be sure – contain some interesting and eagerly anticipated nuggets:

  • Many employers with non-calendar year plans may not have to comply with the mandate until the first day of their plans’ 2015-16 plan year. Some employers who recently changed plan years may not be able to enjoy this relief, however.    
  • Employers with 50-99 full-time employees in their corporate family tree enjoy an additional year’s free pass under the mandate. Their compliance won’t be required until 2016.    
  • The proposed regulations would have required employers subject to the mandate to offer coverage to at least 95 percent of their full-time employees or risk wide-reaching penalties. This threshold is softened to 70 percent for 2015, for employers that must comply with the mandate beginning next year.    
  • Under health reform, “full-time employees” are those who average at least 30 hours per week. The final regulations provided guidelines with respect to some employees whose hours are difficult to count:
  1. Many volunteers’ hours are not counted.
  2. Regulators confirmed that employees of educational institutions can’t be treated as part-time simply because they’re not working during breaks in the school calendar (such as summer vacation).
  3. Schools may credit adjunct faculty with 2-1/4 hours of work for each classroom hour.
  4. Students participating in work-study programs are not considered employees (for health reform purposes) based on their work-study hours.   
  • Under the proposed regulations, employers who utilized a long enough look-back measurement period tended to dodge play or pay mandate obligations with respect to seasonal employees, unless the period of “seasonal” employment extended for the bulk of the year. However, the regulations did not define “seasonal.” The final regulations provide that seasonal employees are those for which customary annual employment is six months or less. Employers utilizing a 12-month measurement period for employees meeting the “seasonal” definition should be able to avoid play or pay mandate obligations with respect to them.
  • The final regulations retain much of the proposed regulations’ structure for determining full-time status for variable hour employees (i.e., the use of look-back measurement periods, etc.).

We’ll have much more on the final regulations shortly, including a webcast. Please click to register for the webcast.

 GCGreg Cushard is vice president /producer at Lockton, leading a strategy and consulting practice. His practice expertise at Lockton is in high risk energy companies, focusing on corporate insurance brokerage, enterprise risk management, captive insurance consulting, and employee benefits. Cushard’s petroleum and crude oil industry expertise resides with refiners, terminal and storage facility operators, gas and convenience store operators, wholesalers, private fleet haulers, and rail exposures. Contact: [email protected] or www.lockton.com

 

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