Shared Responsibility Final Rule and Transition Relief

Transition Relief for Employers with 50 to 99 full-time employees (or equivalents)

Employers with 50 to 99 full-time employees (including full-time equivalents) in 2014 will not be subject to shared responsibility penalties until 2016. In order to qualify for this delay:

The employer may not reduce the size of its workforce or the overall hours of service of its employees in order to satisfy the workforce size requirement. A reduction in workforce size or overall hours of service for bona fide business reasons will not be considered to have been made in order to satisfy the workforce size condition.
The employer may not eliminate or materially reduce coverage offered as of February 9, 2014.
The employer must certify to the IRS that it meets the requirements for the delay.
The relief applies to calendar year 2015 and any months in 2016 that are part of the 2015 plan year, provided that the employer has not modified its plan year after February 9, 2014.
The compliance date for larger employers remains 2015.

Transition relief for non-calendar year plans

Transition relief is available for non-calendar year plans of employers that maintained non-calendar year plans as of December 27, 2012 and that have not modified the plan after that date.

If an employee of an applicable large employer (whenever hired) who would be eligible for coverage effective beginning on the first day of the 2015 plan year under the eligibility terms of the plan as in effect on February 9, 2014 is offered affordable coverage that provides minimum value no later than the first day of the 2015 plan year, no shared responsibility payment will be due with respect to that employee for the period prior to the first day of the 2015 plan year.
If an employer (1) had, as of any date in the 12 months ending on February 9, 2014, at least one quarter of all its employees covered under non-calendar year plans, or (2) offered coverage under those plans to one third or more of its employees during the open enrollment period that ended most recently before February 9, 2014, no shared responsibility payment will be due for any month prior to the first day of the 2015 plan year with respect to employees who (1) are offered affordable coverage that provides minimum value no later than the first day of the 2015 plan year, and (2) would not have been eligible for coverage under any group health plan maintained by the applicable large employer member as of February 9, 2014, that has a calendar year plan year. Note however, that this exception does not apply unless the employer offers coverage to substantially all its full-time employees and their dependents as of the first day of the 2015 plan year.
If an employer (1) had, as of any date in the 12 months ending on February 9, 2014, at least one third of its full-time employees covered under non-calendar year plans, or (2) offered coverage under those plans to one half or more of its full-time employees during the open enrollment period that ended most recently before February 9, 2014, no shared responsibility payment will be due for any month prior to the first day of the 2015 plan year with respect to full-time employees who (1) are offered affordable coverage that provides minimum value no later than the first day of the 2015 plan year, and (2) would not have been eligible for coverage under any group health plan maintained by the applicable large employer member as of February 9, 2014, that has a calendar year plan year. Note however, that this exception does not apply unless the employer offers coverage to substantially all its full-time employees and their dependents as of the first day of the 2015 plan year.

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