Department of the Treasury - GPO

Federal Register / Vol. 79, No. 29 / Wednesday, February 12, 2014 / Rules and Regulations 8599

mstockstill on DSK4VPTVN1PROD with RULES2 the applicable large employer member, respect to a full-time employee applies (i) Conditions of using an affordability
then there is imposed on the applicable solely to the applicable large employer safe harbor. An applicable large
large employer member an assessable member that was the employer of that employer member may use one or more
payment equal to the product of the employee for that calendar month. For of the affordability safe harbors
number of full-time employees of the an employee who was a full-time described in this paragraph (e)(2) only if
applicable large employer member for employee of more than one applicable the employer offers its full-time
which it has received a Section 1411 large employer member during that employees and their dependents the
Certification (minus the number of those calendar month, the liability for the opportunity to enroll in minimum
employees in a limited non-assessment assessable payment under section essential coverage under an eligible
period for certain employees and the 4980H(b) for a calendar month applies employer-sponsored plan that provides
number of other employees who were to the applicable large employer minimum value with respect to the self-
offered the opportunity to enroll in member for whom the employee has the only coverage offered to the employee.
minimum essential coverage under an greatest number of hours of service for Use of any of the safe harbors is optional
eligible employer-sponsored plan that that calendar month (if the employee for an applicable large employer
satisfied minimum value and met one or has an equal number of hours of service member, and an applicable large
more of the affordability safe harbors for two or more applicable large employer member may choose to apply
described in paragraph (e) of this employer members for the calendar the safe harbors for any reasonable
section) and the section 4980H(b) month, those applicable large employer category of employees, provided it does
applicable payment amount. members can treat one of those members so on a uniform and consistent basis for
Notwithstanding the foregoing, the as the employer of that employee for all employees in a category. Reasonable
aggregate amount of assessable payment that calendar month for purposes of this categories generally include specified
determined under this paragraph (a) paragraph (d), and if the members do job categories, nature of compensation
with respect to all employees of an not select one member, or select in an (hourly or salary), geographic location,
applicable large employer member for inconsistent manner, the IRS will select and similar bona fide business criteria.
any calendar month may not exceed the a member to be treated as the employer An enumeration of employees by name
product of the section 4980H(a) of that employee for purposes of the or other specific criteria having
applicable payment amount and the assessable payment determination). For substantially the same effect as an
number of full-time employees of the a calendar month, an applicable large enumeration by name is not considered
applicable large employer member employer member may be liable for an a reasonable category.
during that calendar month (reduced by assessable payment under section
the applicable large employer member’s 4980H(a) or under section 4980H(b), but (ii) Form W–2 safe harbor–(A) Full-
ratable allocation of the 30 employee will not be liable for an assessable year offer of coverage. An employer will
reduction under § 54.4980H–4(e)). payment under both section 4980H(a) not be subject to an assessable payment
and section 4980H(b). under section 4980H(b) with respect to
(b) Offer of coverage. For purposes of a full-time employee if that employee’s
this section, the same rules with respect (e) Affordability—(1) In general. An required contribution for the calendar
to an offer of coverage for purposes of employee who is offered coverage by an year for the employer’s lowest cost self-
section 4980H(a) apply. See applicable large employer member may only coverage that provides minimum
§ 54.4980H–4. be eligible for an applicable premium value during the entire calendar year
tax credit or cost-sharing reduction if (excluding COBRA or other
(c) Partial calendar month. If an that offer of coverage is not affordable continuation coverage except with
applicable large employer member fails within the meaning of section respect to an active employee eligible
to offer coverage to a full-time employee 36B(c)(2)(C)(i) and the regulations for continuation coverage) does not
for any day of a calendar month, that thereunder. exceed 9.5 percent of that employee’s
employee is treated as not offered Form W–2 wages from the employer
coverage during that entire month, (2) Affordability safe harbors for (and any other member of the same
regardless of whether the employer uses section 4980H(b) purposes. The applicable large employer that also pays
the payroll period rule set forth in affordability safe harbors set forth in wages to that employee) for the calendar
§ 54.4980H–3(d)(1)(ii) or the weekly rule paragraph (e)(2)(ii) through (iv) of this year. Application of this safe harbor is
set forth in § 54.4980H–3(c)(3) to section apply solely for purposes of determined after the end of the calendar
determine full-time employee status for section 4980H(b), so that an applicable year and on an employee-by-employee
the calendar month. However, in a large employer member that offers basis, taking into account the Form W–
calendar month in which a full-time minimum essential coverage providing 2 wages and the required employee
employee’s employment terminates, if minimum value will not be subject to an contribution for that year. In addition, to
the employee would have been offered assessable payment under section qualify for this safe harbor, the
coverage if the employee had been 4980H(b) with respect to any employee employee’s required contribution must
employed for the entire month, the receiving the applicable premium tax remain a consistent amount or
employee is treated as having been credit or cost-sharing reduction for a percentage of all Form W–2 wages
offered coverage during that month. period for which the coverage is during the calendar year (or during the
Also, an applicable large employer determined to be affordable under the plan year for plans with non-calendar
member is not subject to an assessable requirements of an affordability safe year plan years) so that an applicable
payment under section 4980H with harbor. This rule applies even if the large employer member is not permitted
respect to an employee for the calendar applicable large employer member’s to make discretionary adjustments to the
month in which the employee’s start offer of coverage that meets the required employee contribution for a
date occurs if the start date is on a date requirements of an affordability safe pay period. A periodic contribution that
other than the first day of the calendar harbor is not affordable for a particular is based on a consistent percentage of all
month. employee under section 36B(c)(2)(C)(i) Form W–2 wages may be subject to a
and an applicable premium tax credit or dollar limit specified by the employer.
(d) Applicability to applicable large cost-sharing reduction is allowed or
employer member. The liability for an paid with respect to that employee. (B) Adjustment for partial-year offer
assessable payment under section of coverage. For an employee not offered
4980H(b) for a calendar month with

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