The Benefits Game - Playbook for Compliance with the Health Care Reform’s Pay or Play Rules for Employers


The Affordable Care Act’s (ACA’s) employer shared responsibility provisions (commonly called “pay or play”) impact “large” employers and go into effect in 2014. Although effective in 2014, employers must plan NOW. Advance preparation is even more important for employers with “variable hour” employees.

The pay or play rules are complex and technical Internal Revenue Code rules that require large employers to either offer health coverage to full-time employees or pay tax penalties–the law calls “assessable payments.”

For many large employers, determining whether to “pay or play” will not be an easy process. Employers need sufficient education on how this law operates, what impact the law has on its business and bottom line, and how to successfully navigate it in the best interests of the business and its employees. This law has been in constant flux. There has been a steady stream of sub-regulatory guidance issued by the government. Proposed regulations were issued January 2013, and further proposed regulations affecting this topic were issued on May 3, 2013. While things could change in final regulations, employers can rely on the proposed regulations until issuance of final regulations or other guidance. Since you are only required to either potentially pay (a penalty for) or play (offer coverage to) those individuals who are considered your full-time employees (and their dependents), your ability to substantiate whether an employee is or is not “full-time” will be critical to successfully navigating the “pay or play” provisions of the ACA.

Please see full alert below for more information.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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