Obamacare: Proposed Regulations on Employer Shared Responsibility Provisions

January 3, 2013

The IRS last week released proposed regulations on the “employer shared responsibility” provisions of Obamacare which will become effective on January 1, 2014. See REG-138006-12. Very briefly, these provisions can subject a “covered” employer to a special tax if the covered employer does not offer “affordable health coverage” that provides a “minimum level of coverage” to its full-time employees and at least one of the covered employer’s full-time employees receives a premium tax credit for purchasing individual healthcare coverage on an insurance exchange set up under Obamacare. A “covered” employer is an employer which employs at least 50 full-time or full-time equivalent employees. Note that the proposed regulations cover 144 pages, and the IRS is requesting comments on the proposed regulations by March 18, 2013. Finally, the IRS also released a set of questions and answers on the employer shared responsibility provisions, which are set forth in 8 pages. Each covered employer should find these questions and answers helpful in understanding from 25,000 feet what the covered employer will face starting on January 1, 2014. See Fact sheet on shared responsibility provisions.

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