By, Jennifer Pigeon – Benefit Intelligence Strategic Benefit Advisor
The Affordable Care Act (ACA) requires applicable large employers (ALEs) to offer affordable, minimum value health coverage to their full-time employees or possibly pay a penalty. This employer mandate is also known as the “employer shared responsibility” or “pay or play” rules.
Due to the unique workforce structure of educational organizations, these rules include special averaging methods under which employees of educational organizations who work full-time during the active portions of the academic year will generally be treated as full-time for purposes of the ACA’s employer shared responsibility rules.
This ACA Overview summarizes the ACA’s guidance with respect to the special averaging rules that apply for employees of educational organizations under the employer shared responsibility rules.
Applicable Large Employers
Only ALEs are subject to these rules.
- ALEs are employers that employ, on average, at least 50 full-time and full-time equivalent (FTE) employees during the preceding calendar year.
- All ALEs are subject to these rules, including for-profit, nonprofit and government employers.
Educational Organizations
- Educational organizations are different from other workplaces because the academic year includes extended periods when school is not in session and employees perform few or no services.
- As a result, special averaging methods apply for employees of educational organizations.
LINKS AND RESOURCES
- On July 9, 2013, the Internal Revenue Service (IRS) issued Notice 2013-45 to provide formal guidance on the one-year delay.
- On Feb. 12, 2014, the IRS published final regulations on the ACA’s employer shared responsibility rules.
- The IRS has also provided Questions and Answers for employers on the employer shared responsibility rules.