Flurry of ACA Guidance Issued Congress Breaks for Elections

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Flurry of ACA Guidance Issued Congress Breaks for Elections
Calendar23 September 2014

Last week brought new IRS guidance explaining how employers subject to the ACA's shared-responsibility rules can determine the full-time status of employees after (i) they transfer between jobs with different measurement periods or (ii) the employer changes its measurement approach. The guidance also addresses how to determine the full-time status of employees acquired in mergers or acquisitions.

In addition, the IRS expanded permitted cafeteria plan election changes to allow employees to opt out of an employer's health plan prospectively if their hours are reduced to less than 30 per week or they can enroll in public exchange coverage during the exchange's open or special enrollment period. Plans can rely on the representations of employees that they (and any related individuals) have enrolled or intend to enroll in another plan that provides minimum essential coverage, or in coverage on the exchange, as applicable.

The Service also issued final regulations implementing Section 162(m)(6)'s $500,000 annual cap on deductible compensation paid to any officer, employee, director, or other service provider by certain health insurance providers and members of its controlled group.

Congress last week adjourned until a post-election lame-duck session. Just before leaving town, however, the House passed a “jobs” package including legislation to change the ACA’s definition of a full-time worker from 30 to 40 hours per week and to repeal the law’s medical device tax. The package will go nowhere in the Senate this year, but it gives Republicans talking points on the economy as they head home to campaign.

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