If an employer does not offer health coverage (and owes no excise tax), what requirements must it meet?

[Peter Gulia]

An employer, since the beginning of its operations, has restrained every employee's work hours to no more than 20 in any week (and no more than 980 in any year).

This employer (which has no subsidiary, affiliate, or other business that is treated as the same employer under IRC 414) believes it has no exposure (despite more than 50 full-time-equivalent employees) to the IRC 4980H play-or-pay excise tax. Is that correct?

Is such an employer's only compliance requirement information-reporting about its non-offer of health coverage?

[leevena]

I am a health guy, not retirment, so I am guessing that IRC 414 refers to common ownership. The law states that groups above the 50 FTE level are classified as a large group, and as such subject to the ACA. Appears that the group is subject to the penalties and provisions.

Tried to paste the link and could not, go to www.irs.gov/affordable-care-act/employers.

[Flyboyjohn]

This ALE has to comply with the reporting requirement of filing a 1094-C reporting zero FT EEs but since they have no FT EEs they don't have to file/distribute any 1095-Cs.

Since they can only be penalized with respect to FT EEs and they has none they're also safe on penalties.

However, note that a recent class action lawsuit was filed against Dave & Buster's for limiting EE hours with the evil intent of depriving them of ERISA/ACA protected benefits, will be interesting to see how that shakes out.

[My 2 cents]

This ALE has to comply with the reporting requirement of filing a 1094-C reporting zero FT EEs but since they have no FT EEs they don't have to file/distribute any 1095-Cs.

Since they can only be penalized with respect to FT EEs and they has none they're also safe on penalties.

However, note that a recent class action lawsuit was filed against Dave & Buster's for limiting EE hours with the evil intent of depriving them of ERISA/ACA protected benefits, will be interesting to see how that shakes out.

[personal opinion] People who run their businesses by deliberately holding hours down to deprive their employees of normal employee benefits should be ashamed of their unmitigated selfishness. Karma demands that such employers go to bed every night wondering why they can't find or retain competent employees.

[Peter Gulia]

leevena, yes IRC 414 is about common ownership and other ways that several separate persons might be treated as a single employer.

Flyboyjohn, thank you for the information-reporting answer.

About the ERISA section 510 complaint against Dave & Buster's, I spoke about it in May at a bar association meeting, and for a Pennsylvania Bar Institute CLE on June 8. For BenefitsLink readers (including My 2 cents), I attach the complaint.

The hypothetical employer described is based on a charity that restricts its employees' work hours because not doing so would be financially disadvantageous to those workers who are not covered under another employer's plan or a spouse's employer's plan. For them, receiving an offer of coverage would disqualify the person from Affordable Care Act subsidies. For most of these workers, the available subsidy is much more than the excise tax the charity would incur, and for many the lost subsidy is more than what the charity would pay to make health coverage sufficiently affordable not to incur the excise tax.

Moreover, administering the conditions of the charity's funders, including government agencies, makes it not feasible for the charity to bear an employee-benefits expense that is not a tidy allocation to a particular grant's conditions. And even if there were a way to do the accounting, anything the charity paid for health coverage would reduce the money available to pay cash wages. Many of these workers prefer cash wages over employer-provided health coverage, especially if other health coverage, if needed, can be obtained with a government subsidy. And the charity can't pay out more than the grants-makers and donors give.

Dave and Busters.pdf

[hr for me]

One thing that might protect the original employer in question is that you said "since the beginning of operations".

When did operations start? pre or post PPACA? It could be argued that if it was PRE that the policy didn't change BECAUSE of PPACA regulations. However, if it changed POST, the employer could definitely have an issue with holding back hours specifically to remove themselves from PPACA's coverage. Otherwise if they can show this was their mode of operation prior to the health insurance requirements, they might be safer.

personal opinion --> Not every business is making enough money pay "normal benefits" to every or even most employees. Many small employers go to sleep hoping they can make enough to pay regular wages for the pay period. Not all CEOS/owners are taking huge salaries and lots of perqs.

Now to go read the D&B files attached.....