Employee Benefits - Health Care Reform Play-or-Pay Requirements Partially Delayed, Scaled Back, and Clarified Under New Final Regulations

February 14, 2014

In this issue:

Health Care Reform Play-or-Pay Requirements Partially Delayed, Scaled Back, and Clarified Under New Final Regulations

Beginning in 2015, the Patient Protection and Affordable Care Act ("Health Care Reform') generally requires certain large employers to pay a tax penalty for every month in which the employer fails to offer substantially all full-time employees and their dependents adequate health coverage that is affordable and provides minimum value, if a full-time employee enrolls in health coverage through a governmental health insurance exchange ("Exchange") and qualifies for a premium tax credit or subsidy ("Play-or-Pay penalties.") New final regulations delay the Play-or-Pay penalties for mid-size employers until 2016, and relax the standard for determining whether "substantially all" full time employees and their dependents are offered coverage for 2015. The new regulations also clarify a number of issues concerning how the Play-or-Pay penalty affects specific groups of individuals.

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