Post­ed by Lin­da Rowings

payorplayThe employ­er-shared respon­si­bil­i­ty (“play or pay”) require­ments do not apply to small employ­ers and have been delayed until 2016 for most mid-sized employ­ers. This rais­es the ques­tion – what exact­ly is includ­ed in the play or pay require­ment, which a small employ­er may be able to ignore and that mid-size employ­er may not need to meet until later?

Employ­er-shared respon­si­bil­i­ty includes five basic require­ments that must be met by a large employ­er to avoid penalties:

  1. The employ­er must offer min­i­mum essen­tial cov­er­age to at least 95% of its full-time employ­ees (under a tran­si­tion rule, for 2015 the require­ment is to offer min­i­mum essen­tial cov­er­age to 70% of full-time employees).
  2. The employ­er must offer afford­able, min­i­mum val­ue cov­er­age to its full-time employees.
  3. The employ­er must con­sid­er an employ­ee as full-time for health cov­er­age pur­pos­es if the employ­ee aver­ages 30 or more hours work per week.
  4. The employ­er must offer min­i­mum essen­tial cov­er­age to nat­ur­al and adopt­ed depen­dent chil­dren until the end of the month in which the child reach­es age 26 (under a tran­si­tion rule, this require­ment is gen­er­al­ly delayed to 2016).
  5. The employ­er must offer employ­ees the oppor­tu­ni­ty at least once a year to elect or decline cov­er­age under the group health plan (with an excep­tion to the required oppor­tu­ni­ty to decline cov­er­age for par­tic­u­lar­ly gen­er­ous coverage).

Employ­ers that are small enough that the play or pay require­ments do not apply, or have been delayed, still must meet many require­ments under the Patient Pro­tec­tion and Afford­able Care Act, such as the lim­it on wait­ing peri­ods, but they need not meet the cri­te­ria of the play or pay pack­age to avoid penal­ties. Cau­tion: ful­ly insured plans must meet both state and fed­er­al require­ments, so small and mid-size employ­ers with insured plans should make sure that their plans meet state insur­ance law require­ments. For exam­ple, some states have adopt­ed the 30-hour thresh­old for eli­gi­bil­i­ty, and some require that cov­er­age be offered to spous­es and children.

Note: for pur­pos­es of this blog piece, “small” means that the employ­er had few­er than 50 full-time or full-time equiv­a­lent employ­ees in its con­trolled group dur­ing the pri­or cal­en­dar year. “Mid-size” means the employ­er had 50 to 99 full-time or full-time equiv­a­lent employ­ees in its con­trolled group dur­ing the 2014 cal­en­dar year and has not mate­ri­al­ly reduced ben­e­fits, eli­gi­bil­i­ty or con­tri­bu­tions from the lev­el in effect on Feb­ru­ary 9, 2014. Mid-size employ­ers will need to pro­vide report­ing on avail­able cov­er­age for 2015, even though the actu­al employ­er shared respon­si­bil­i­ty require­ments gen­er­al­ly will not be effec­tive for mid-size employ­ers until 2016.

To help employ­ers under­stand the pay or play pro­vi­sions of the PPACA, down­load UBA’s white paper, “The Employer’s Guide to Play or Pay”. For help fur­ther help mak­ing pay or play deci­sions under PPACA, request UBA’s com­pli­ance and deci­sion guides for small and large employ­ers.

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