Whenever Congress draws a line in the sand—such as with exposure for assessable payments under the Affordable Care Act’s employer shared responsibly rules—entities subject to regulation (here, applicable large employers) will inevitably seek ways to avoid having to comply. Also inevitably, some compliance strategies will be perfectly legitimate, while others will not. One approach that falls into the latter category involves capping annual hours of certain, “variable hour” and other employees at 1,560 hours. Simply put, the approach does not work. This post explains why.The Affordable Care Act’s employer shared responsibility rules are codified in Internal Revenue Code § 4980H and fleshed out in excruciating detail in final regulations issued earlier this year. Employers that are subject to these rules (“applicable large employers”) are by now generally familiar if not conversant with the rule’s basic structure: An applicable large employer is subject to an assessable payment if one or more full-time employees is certified to the employer as having received an applicable premium tax credit or cost-sharing reduction and either:The employer fails to offer to its full-time employees (and their dependents) the opportunity to enroll in minimum essential coverage (MEC) under an eligible employer sponsored plan, orThe employer offers its full-time employees… Read full this story
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The Affordable Care Act—Countdown to Compliance for Employers, Week 32: Why Capping Annual Hours at 1560 Does Not Work have 318 words, post on www.natlawreview.com at May 19, 2014. This is cached page on Law Breaking News. If you want remove this page, please contact us.