On May 13, 2014, the IRS updated its Questions and Answers on the Employer Shared Responsibility Provisions to include further clarification and information for employers. Notably, these Q&As address consequences under the employer shared responsibility rules for applicable large employers that offer health insurance coverage to all full-time employees, but do not offer dependent coverage. In general, an applicable large employer will potentially be liable for a penalty only if:
• The employer does not offer health coverage to the dependents of its full-time employees (as well as to those full-time employees themselves); and
• At least one of its full-time employees receives a subsidy for purchasing individual coverage through an Exchange.
Whether or not one or more of its full-time employees’ dependents enrolls through an Exchange and receives a subsidy does not affect an employer’s liability. The FAQs also noted that transition relief is available with respect to offering dependent coverage in 2015. This Pay or Play – Penalties for Failing to Offer Dependent Coverage Health Care Reform Bulletin provides an overview of the FAQs.