New Year, but Not for ACA’s Non-Calendar-Year Plans

Here we are, kicking off 2015 – the official beginning of the Affordable Care Act’s employer mandate. However, some employers have plan years that don’t begin on Jan. 1 and will not take part in the fun just yet.

Transitional relief provides employers whose plans don’t start on Jan. 1 an opportunity for respite, so long as they meet the requisites below. Employers who fall into this category do not have to comply with ACA requirements until the beginning of their 2015 plan year, as long as their employees are offered affordable, minimum-value coverage from day one of the 2015 plan year.

The following are required in order to qualify for transitional relief.

1. All plans must have been adopted and legally in effect on or before Dec. 27, 2012. Appropriate documentation, including for the Employee Retirement Income Security Act (ERISA), must have been established by this date.
2. After Dec. 27, 2012, employers could not have modified the plan-year start date of non-calendar plans.
3. The employer must offer coverage to an acceptable percentage of employees, in one of two scenarios:
   1. As of any date in the 12 months ending Feb. 9, 2014, at least 25 percent of employees are covered under the non-calendar-year plan, or
   2. During the non-calendar-year plan during the most recent open-enrollment period ending before Feb. 9, 2014, at least one-third of its employees or 50 percent of its full-time employees were offered coverage.

Provided that each applicable large employer has followed these three requirements, transitional relief is granted. However, all other employers must adhere to the rules and regulations of ACA’s employer mandate, which went into effect Jan 1.

Disclaimer: You should speak to an attorney regarding your specific situation and to determine whether you qualify for this relief.

The content of this blog is intended to keep interested parties informed of legal and industry developments for educational purposes only.  It is not intended as legal opinion or tax advice and should not be regarded as a substitute for legal or tax advice.