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IRS issues final regs on health act’s employer shared responsibility provisions

February 11, 2014

T.D. 9655, 02/10/2014, Reg. § 54.4980H-1, Reg. § 54.4980H-2, Reg. § 54.4980H-3, Reg. § 54.4980H-4, Reg. § 54.4980H-5 , Reg. § 54.4980H-6

IRS has issued final regs that provide guidance to employers that are subject to the shared responsibility provisions for employee health coverage under Code Sec. 4980H, which was enacted by the Affordable Care Act (ACA).

These regs affect employers that are “applicable large employers” (generally meaning, for each year, employers that had 50 or more full-time employees, including full-time equivalent employees, during the prior year).The regs implement provisions under the ACA that take effect in 2015.

As summarized in a Treasury press release, the final regs:


…address a number of questions about how plans can comply with the employer shared responsibility provisions;
…ensure that volunteers such as firefighters and emergency responders do not count as full-time employees; and
…phase in provisions for businesses with 50 to 99 full-time employees and those that offer coverage to most but not yet all of their full-time workers.


The press release also provides the following information:


  • Small businesses with fewer than 50 employees:Under the ACA, companies that have fewer than 50 employees are not required to provide coverage or fill out any forms in 2015, or in any year.
  • Employers with 50 to 99 employees:Companies with 50-99 employees that do not yet provide quality, affordable health insurance to their full-time workers will report on their workers and coverage in 2015, but have until 2016 before any employer responsibility payments could apply.
  • Larger employers with 100 or more employees:The regs phase in the percentage of full-time workers that employers need to offer coverage to from 70% in 2015 to 95% in 2016 and beyond. Employers in this category that do not meet these standards will need to make an employer responsibility payment for 2015.


Additional information on the regs will be provided in an upcoming article.