Many employers — including nonprofits — will enjoy a one-year respite from a significant provision of the 2010 health care act: shared responsibility, also known as “play or pay.” The provision will take effect Jan. 1, 2015, rather than Jan. 1, 2014, as originally scheduled. The deferral was announced in July.
Under the play-or-pay provision, “large” employers that don’t offer a “minimum value” of “affordable health coverage” to their full-time employees will risk a penalty if just one full-timer receives a premium tax credit for purchasing individual coverage through one of the new affordable insurance exchanges. “Large” employers have 50 or more full-time employees — or a mix of part-timers and full-timers that’s “equivalent” to 50 or more full-timers.
If you are a large employer, you now have more time to determine whether your coverage meets the requirements and, if it doesn’t, to consider whether to adjust coverage to comply or risk the penalties. Keep in mind that additional IRS guidance is expected.
If you’re a smaller organization, be aware that, beginning in 2014, an enhanced version of the health care coverage tax credit may be available to reimburse your nonprofit for up to 35% of the health care premiums you pay.
Contact us if you have questions on how these changes will affect your nonprofit.