Flyboyjohn Posted May 5, 2015 Share Posted May 5, 2015 There are 6 requirements a 50-99 mid-size employer must meet in order to qualify for ACA transition relief, including not changing its plan year to begin at a later date after 2/9/14. If the employer meets all 6 requirements penalty exposure is delayed a year until the end of the plan year that begins in 2015 (for example, a plan that renews 7/1/2015 would not be subject to penalty until 7/1/2016). The question is what the consequences are if an employer meets the other 5 requirements but changes it's plan year in 2015 (say for example from a 7/1 renewal to a 10/1 renewal). Some commentators contend that the transition relief is blown entirely and the employer is subject to penalty exposure retroactively as of 1/1/2015. Others contend that the relief is still granted for 2015 but penalty exposure begins 1/1/2016 and only the remaining months in the 2015-2016 plan year are "lost". Any opinions on this sticky issue welcome. Link to comment Share on other sites More sharing options...
Benefits 101 Posted May 13, 2015 Share Posted May 13, 2015 This is purely guessing on anyone's part in my book... but if I were to bet on an outcome, I'd bet on #2. I'd advise and practice as if #1 were true. Link to comment Share on other sites More sharing options...
Peter Gulia Posted May 13, 2015 Share Posted May 13, 2015 If the expense saved by changing a plan year or an insurance-contract year makes dealing with the question worthwhile, consider asking the Internal Revenue Service for a letter ruling, perhaps seeking an expedited ruling. Peter Gulia PC Fiduciary Guidance Counsel Philadelphia, Pennsylvania 215-732-1552 Peter@FiduciaryGuidanceCounsel.com Link to comment Share on other sites More sharing options...
GBurns Posted May 14, 2015 Share Posted May 14, 2015 Considering the cost of getting a PLR, it does not seem worthwhile to take a chance. I doubt that there is a viable reason not to make the change in a timely manner. George D. Burns Cost Reduction Strategies Burns and Associates, Inc www.costreductionstrategies.com(under construction) www.employeebenefitsstrategies.com(under construction) Link to comment Share on other sites More sharing options...
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