Below is a summary of some of the key labor laws and trends to keep in mind as we approach 2015:
1. The Employer Mandate – The Employer Mandate is the provision in the Affordable Care Act that requires all employers with 50 or more full time equivalent employees to offer a certain level of health insurance coverage at an affordable rate to all full time employees or face a penalty. An Employer Mandate penalty is triggered if the company fails to comply with the requirements and at least one full‐time employee of a covered employer receives a premium tax credit for purchasing individual coverage on one of the new State Insurance Exchanges, also called the Health Insurance Marketplace. Large employers (those with 100 or more full‐time equivalent employees) who do not comply with the Employer Mandate may begin incurring Employer Mandate penalties in each month of the 2015 tax year.
Midsized employers (those with 50‐99 full time equivalent employees) enjoy an additional year of reprieve as long as the organization did not reduce its worker’s hours/workforce to get below the 99 employee threshold without a bona fide reason or materially reduce its health care plan (the one that was in existence as of 2/9/14), though they will be required to comply with reporting requirements in 2015. For midsized organizations that do not comply with the provisions of the law, Employer Mandate penalties may begin being incurred each month of the 2016 tax year.
With the implementation of the Employer Mandate comes IRS reporting requirements. Employers subject to the Employer Mandate must begin Section 6056 (Employer Mandate) reporting for the 2015 tax year. These forms will be filed with the IRS and provided to employees in early 2016. Employers with 50 or more full time equivalent employees are required to complete and submit one Transmittal Form (IRS Form 1094‐C) and, for each employee, an Employee Statement (IRS Form 1095‐C). It may help you to think of the 1094‐C as similar to the W‐3 (a transmittal form) and the 1095‐C as similar to the W‐2 (a separate return for each employee). The IRS draft forms are available in the HR Support Center.
2. New Flexible Spending Account, Health Savings Account, and 401(k) Account Limits – In 2015, the maximum amounts for certain health and welfare benefit plans will be increasing as listed below:
Medical Flexible Spending Accounts (FSA) – Beginning in 2015, the maximum amount an employee may contribute to a Medical FSA will increase to $2,550, up $50 from the 2014 limit.
Health Savings Accounts (HSA) – Beginning in 2015, the HSA contribution limit for a single individual will increase to $3350, up $50 from 2014. The HSA family limit will increase to $6650, up $100 from 2014. The HSA catch-up contribution for participants age 55 or older will remain the same at $1000.
401(k) & 403(b) Account Contributions – Beginning in 2015, employees will be able to contribute up to $18,000 to their 401(k) or 403(b) plans, up $500 from 2014.
3. Overtime for Domestic Service Workers – Previously, the overtime provisions of the Fair Labor Standards Act (FLSA) did not apply to a large class of domestic service workers based on a “companionship service” exemption. However, beginning in 2015, the federal definition of companionship services has substantially changed. Additionally, the overtime exemptions for companionship services and live-in domestic service employees may only be claimed by the individual, family, or household using the services rather than third party employers such as home health care agencies. Therefore, a third party, such as a staffing agency or home health organization may not claim the overtime exemption, and must compensate domestic service workers using an overtime premium for all overtime hours worked.