IRS Releases Employer Shared Responsibility Proposed Rules

On Friday, December 28, IRS published proposed regulations on the Employer Shared Responsibility ("pay or play") provisions of the ACA. The document explains how to determine large employers who must offer workers affordable, minimum coverage. It also includes guidance on determining employees who qualify as full-time and assessing the fines large employers must pay if they don’t meet the requirements. These proposed regulations would affect only employers that meet the definition of ‘applicable large employer’ as described in these proposed regulations, generally those with 50 or more full time employees. Employers may rely on these proposed regulations for guidance pending the issuance of final regulations or other applicable guidance.

In the proposed rules, the IRS tackled some tricky questions posed by the new employer regulations — like whether foreign or seasonal workers could be considered full time and how to calculate the full-time status of employees who work unusual hours, such as teachers or airline pilots. The agency also said large employers must offer coverage not just to its employees but to their families as well. The proposal suggests using the term “hours of service” instead of “hours worked,” saying the former term includes not only hours when work is performed but also hours for which an employee is paid or entitled to payment.

Comments are due on March 18, 2013; NBCH will be drafting and submitting comments on the proposed regulations.