Questions and Answers on Employer Shared Responsibility Provisions Under the Affordable Care Act

On Feb. 10, 2014, the IRS and Treasury issued final regulations on the Employer Shared Responsibility provisions under section 4980H of the Internal Revenue Code. More information is available on the employer shared responsibility page. The following questions and answers provide helpful information about the guidance:

• Basics of the Employer Shared Responsibility Provisions: Questions 1-3
• Which Employers are Subject to the Employer Shared Responsibility Provisions: Questions 4-14
• Identification of Full-Time Employees: Questions 15-17
• Liability for the Employer Shared Responsibility Payment: Questions 18-23
• Calculation of the Employer Shared Responsibility Payment:Questions 24-26
• Making an Employer Shared Responsibility Payment: Questions 27-28
• Transition Relief: Questions 29-39
• Basics for Small Employers: Questions 40-42
• Related Provisions: Questions 43-47
• Additional Information: Questions 48-56

Basics of the Employer Shared Responsibility Provisions

1. What are the Employer Shared Responsibility provisions?
For 2015 and after, employers employing at least a certain number of employees (generally 50 full-time employees or a combination of full-time and part-time employees that is equivalent to 50 full-time employees) will be subject to the Employer Shared Responsibility provisions under section 4980H of the Internal Revenue Code (added to the Code by the Affordable Care Act). As defined by the statute, a full-time employee is an individual employed on average at least 30 hours of service per week. An employer that meets the 50 full-time employee threshold is referred to as an applicable large employer.
Under the Employer Shared Responsibility provisions, if these employers do not offer affordable health coverage that provides a minimum level of coverage to their full-time employees (and their dependents), the employer may be subject to an Employer Shared Responsibility payment if at least one of its full-time employees receives a premium tax credit for purchasing individual coverage on one of the new Affordable Insurance Exchanges, also called a Health Insurance Marketplace (Marketplace).