IRS Offers Some Help with ‘Pay or Play’ Proposals

The IRS kicked off 2013 with a little relief for some employers under the Patient Protection and Affordable Care Act (PPACA).

The proposed guidance, released Dec. 28, 2012, eases some of the penalties for larger employers who fail to provide adequate health care coverage for all their full-time employees. The PPACA “pay or play” penalty — $2,000 per full-time employee for employers with at least 50 workers as of Jan. 1, 2014 — will not apply as long as the employer covers at least 95 percent of their full-time employees and their dependents up to age 26, according to Littler Mendelson PC.

The proposed guidance clears up questions that have lingered since the inception of the law in 2010, according to a report in Business Insurance. As it was originally written, any employee with a large employer who opted to receive a premium subsidy under the PPACA-created health care exchanges instead of taking the employer-sponsored coverage might trigger the penalty for the employer. The 95 percent rule would give employers a little wiggle room in case a handful of employees decided to take the subsidy.

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