The Patient Protection and Affordable Care Act ("ACA"), like a LEGO® structure, is made up of many interlocking pieces. Consequently, the United States Supreme Court's recent decision in King v. Burwell, regarding individual tax credit/premium subsidies for coverage under a qualified health plan, had ramifications for employers as well as individuals. The Court's decision regarding the extent of the availability of the premium subsidy also decided the extent of the requirement for individuals to maintain minimum essential coverage (sometimes called the "individual mandate") and the employer "shared responsibility" rules (sometimes called the "pay or play" rules). The decision in King also confirmed the reach of the reporting requirements that will provide the foundation for the Internal Revenue Service's administration of the premium subsidy, the "individual mandate" and the employer shared responsibility rules.

This Update focuses on the reporting and disclosing obligations of applicable large employers ("ALEs") that are subject to the employer shared responsibility rules. Generally, an ALE is an employer with at least 50 full-time or full-time equivalent employees. The reporting and disclosure requirements, along with the reporting obligations of insurers and employer sponsors of self-funded health plans, are at the heart of the IRS's administration of the interlocking pieces of the ACA.

IRS Transition Relief for Small Employers Ends June 30, 2015

Like the driver who is surprised to learn that the "safe" speed that he has been driving is actually ten miles above the speed limit, many employers might be surprised to learn that a practice as innocuous as reimbursing or paying their employees' individual health insurance premiums actually violates the Affordable Care Act ("ACA"). The penalty that could be assessed on the employer for such violations can be financially devastating: $100 per employee per day until the violation is corrected.¹ The IRS provided limited transition relief, however, for "Small Employers," as defined below. The relief is available to Small Employers for all of 2014 and for January 1 through June 30, 2015.²