The Affordable Care Act (ACA) imposes a penalty on applicable large employers (ALEs) that do not offer health insurance coverage to substantially all full-time employees and their eligible dependents.  Penalties may also be imposed if coverage is offered, but is unaffordable or does not provide minimum value. The ACA’s employer penalty rules are often referred to as “employer shared responsibility” or “pay or play” rules.

The pay or play rules will take effect for most ALEs beginning on January 1, 2015. To prepare for compliance, employers that intend to use the look-back measurement method for determining full-time status for 2015 will need to begin tracking their employees’ hours of service in 2014 to have corresponding stability periods for 2015.ALEs who had fewer than 100 full-time employees (including FTEs) generally will have until 2016 to comply with the pay or play rules and therefore will not need to track their employees’ hours of service until 2015.

The enclosed information outlines when an employer should begin to track employee hours for calendar and non-calendar year plans for the initial measurement period.

This information has been prepared by Baldwin Krystyn Sherman Partners ( and has been released to MNMW to share with our clients and colleagues. If you have any questions regarding the Pay or Play Penalty of the ACA, please contact our office at 239.433.5554 or visit

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