The COBRA Blog

Finally … Long Awaited Employer Mandate Guidance

Posted by Robert Meyers on Wed, Feb 12, 2014 @ 11:02 AM

Employer-MandateHere’s another great update from our friend Jason M. Cogdill, Corporate Counsel & Benefits Attorney at ProBenefits, Inc.

On February 10, the IRS released the long-awaited final guidance on the employer mandate.  The guidance (227 pages in length) largely confirms the 12/27/12 proposed guidance on the mandate, but there are significant additions and transition rules. 

For a short summary of key details, attached is the Treasury “Fact Sheet” on the guidance with significant new items highlighted.  If you would like further details right away, the IRS published an extensive Q&A on its website.


  • While the mandate will take effect in 2015 as scheduled, there is a new exemption for 2015 for employers with less than 100 full-time employees,including full-time equivalents.  This will allow a full year of delay (until 2016) for any employer that can certify that it is 50-99 during 2014.  (Employers with 1-49 will continue to be fully exempt going forward.) 
    • Employers subject to the mandate in 2015 (100+ employers) will be required to offer coverage to at least 70% of full-time employees (rather than 95%) in order to avoid the A penalty (“sledgehammer”).  This will help many large employers stage in coverage for employees not currently offered coverage.
    • The maximum penalty for a 100+ employer in 2015 will be the number of full-time employees minus 80 (rather than minus 30).
    • Many 100+ employers with non-calendar year plans will be able to comply as of the 2015 renewal date rather than 1/1/15.  The transition rule in the final guidance is broader than the prior rule on this point.
  • In order to determine whether the mandate applies in 2015, the IRS is allowing employers to use any consecutive 6-month period in 2014 (rather than the full calendar year).  
  • Employers with 100 or more full-time employees plus equivalents will have to comply with the mandate in 2015 as scheduled.  However, there are at least 3 transition rules that will help these employers.  These include:
  • The IRS clarified and simplified certain rules regarding seasonal employees (new, broader 6-month rule applies), teachers and educational employees (including adjunct faculty), and governmental and nonprofit volunteer employees.  Otherwise, the measurement period option for employers to determine eligible status (30-hour rule) remains in effect.

We will continue to share Jason’s updates in an effort to keep you on the front-edge of the Affordable Care Act rollout in the coming weeks and months. If you haven’t already done so, subscribe to our blog at the top of this screen.

Tags: employer mandate, cobra blog, affordable care act, employer mandate guidance, cobra guard

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