The Treasury Department on Monday gave employers more time before they will have to fully comply with a health care reform law requirement that they offer coverage or be liable for a big financial penalty.
In final regulations issued Monday, Treasury said larger employers—those with at least 100 employees—will not be liable for the law's $2,000 per employee penalty in 2015 so long as they extend coverage to at least 70% of their full-time workers.
That is a significant relaxation of earlier proposed regulations that would have penalized employers unless they offered coverage to 95% of their full-time employees—those working an average of 30 hours per week.
Under Monday's final rules, the 95% coverage requirement was delayed until 2016.
Phasing in the mandates will help “employers that, for example, may offer coverage to employees with 35 hours or more hours, but not yet to that fraction of their employees who work 30 to 34 hours,” the Treasury Department said in a fact sheet.
“This one-year transition relief is excellent news and will greatly ease compliance in 2015 for many employers,” said Rich Stover, a principal with Buck Consultants L.L.C. in Secaucus, N.J.
In addition, employers with 50-99 employees will be exempt until 2016 from the requirement to either offer coverage or be liable for the penalty.