On March 18, 2013, SHRM submitted comments to the Internal Revenue Service on the agency’s proposed “shared responsibility” rule, which addresses the requirement that employers with 50 or more full-time equivalent employees provide health care coverage that satisfies the Patient Protection and Affordable Care Act (PPACA).
The proposed IRS rule defines a "large employer" that is subject to the coverage mandate and "full-time employees" who must be offered coverage and details how to calculate the number of full-time employees. The definitions are particularly important to SHRM members, as employers can be penalized if coverage does not meet minimum standards or if the coverage is deemed “not affordable,” resulting in an employee qualifying for subsidized coverage through a public health care exchange.
SHRM’s comments, expressed by Michael P. Aitken, vice president of government affairs, focus principally on maintaining and, in some cases, expanding the proposed rule’s safe harbors and flexible options for transitioning to PPACA-compliant group coverage.
SHRM makes suggestions pertaining to:
- Giving new employers flexibility when they need time to establish employee benefit programs. For instance, SHRM supports a safe harbor allowing new employers with 50 or more full-time equivalents a period of at least six months before they become subject to the shared responsiblity rule.
- Counting hours worked for purposes of the rule (particularly for Fair Labor Standards Act-exempt employees).
- Excluding from the rule’s definition of who must be offered coverage those full-time employees who are covered under health plans of another family member, under student health plans or through another employer.
- Clarifying procedures and giving more time for an employer to appeal when the employer believes that an employee erroneously obtained coverage through a public exchange.
- Retaining a provision that will allow employers to rely on the proposed regulations through 2014.
Proposed Rule on 90-Day Waiting Period Limit, SHRM Online Benefits, March 2013
Newly Eligible May Forgo Health Benefits in 2014, SHRM Online Benefits, March 2013
The Mandate and Beyond, HR Magazine, March 2013
To Comply with PPACA, Employers Must Identify Full-Time Workers, SHRM Online Legal Issues, February 2013
Some Part-Timers to Fall Within Coverage Mandate, SHRM Online Benefits, February 2013
Calculate the Employer Mandate Threshold, SHRM Online Benefits, January 2013
Coverage 'Threshold' Causes Concern SHRM Online Legal Issues, January 2013
SHRM Online Benefits page
SHRM Online Health Care Reform Resource Page