Beginning in 2014, the Patient Protection and Affordable Care Act (Act) requires “applicable large employers” (i.e., employers with 50 or more full-time equivalent employees) to either offer group health insurance coverage to their full-time employees or (potentially) pay a fine. Referred to as “Employer Shared Responsibility” or “pay-or-play” requirements, these rules are set out in new Internal Revenue Code § 4980H. In a notice of proposed rulemaking issued December 28, 2012 (the “proposed regulations”), the Treasury Department and the IRS offered a set of comprehensive rules that address Code § 4980H compliance. This client advisory explains the key features of the proposed regulations.

Summary of Important Provisions -

The proposed regulations include a series of clarifications and new rules that are generally employer-friendly. This is not to say that compliance will be a simple matter; it will not. The statutory scheme is too complex for that. Nevertheless, in a handful of instances, the proposed regulations adopted common sense rules that smooth over some of the Act’s rougher edges. These include...