ACA Pay-or-Play Mandate Eased for 2015

Written by Eva A. Rasmussen

The IRS has issued final regulations on the Pay-or-Play Mandate, which requires certain employers to offer affordable health care coverage with minimum value to their employees or pay a penalty. The regulations impose obligations on employers with 50 or more employees. Employers with less than 50 full-time employees are exempt from the requirements of the Pay-or-Play Mandate.

The final regulations provide sufficient information for employers to develop a compliance strategy for 2015. Clifton Budd & DeMaria has prepared a White Paper, available upon request, describing the final regulations, including determining which employers are subject to the Pay-or-Play Mandate and which employees should be offered coverage to avoid penalties.

A summary of the regulations follows.

I. Pay-or-Play Mandate

Under the final regulations:

(a) Employers with 50–99 Full-Time Employees

(b) Employers with at Least 100 Full-Time Employees

(c) Employers with Less Than 50 Full-Time Employees

In all cases, in determining the number of full-time employees, part-time employees are aggregated to determine the number of full-time equivalent employees.

II. Dependent Coverage

In order to avoid a penalty, coverage must be offered to dependents as well as full-time employees. “Dependents” are defined as children, including adopted children but excluding step-children and foster children. Spouses are not considered dependents. If an employer does not currently offer dependent coverage or only offers it to some employees, the requirement to cover dependents will not apply until the 2016 plan year as long as the employer is taking steps to provide coverage starting with the 2016 plan year.

III. Additional Transitional Relief

The final regulations include transitional relief that is designed to make compliance easier for 2015:

(a) Six-Month Measurement Period

(b) Fiscal Year Plan

If you would like a free copy of this firm’s White Paper, or have any questions about any aspect of the Affordable Care Act, please contact Eva Rasmussen ( or Richard Muser (, lead attorneys at CB&D’s Employee Benefits, Executive Compensation and ERISA Litigation Group.

About the Author
Eva A. Rasmussen
Benefits Counsel
Eva A. Rasmussen concentrates on the design, implementation and communication of qualified plans and deferred compensation arrangements as well as...
More about Eva