There are many important tax changes taking effect in 2015. They are the result of the Tax Increase Prevention Act of 2014 (TIPA) as well as other tax legislation, or are triggered by effective dates in regs, rulings and other guidance.

Employer shared responsibility payment under the Affordable Care Act (ACA). In general, beginning Jan. 1, 2015, employers with at least 100 full-time and full-time equivalent employees must offer affordable health coverage that provides minimum value to their full-time employees and their dependents, or they will be subject to an employer shared responsibility payment. Under the employer shared responsibility rules, if a covered employer does not offer affordable health coverage that provides a minimum level of coverage to their full-time employees (and their dependents), it may be subject to an employer shared responsibility payment if at least one of its full-time employees receives a premium tax credit for purchasing individual coverage on one of the new Affordable Insurance Exchanges, also called Health Insurance Marketplaces.

The employer responsibility provisions will not apply until 2016 to employers with at least 50 but fewer than 100 full-time employees if the employer provides an appropriate certification described in regs.

Employers that are subject to the employer responsibility provisions in 2015 must offer coverage to at least 70% of full-time employees as one of the conditions for avoiding an assessable payment; that percentage will increase to 95% in 2016.

Final regs on the ACA’s 90-day waiting period limit for employer health coverage. For plan years beginning on or after Jan. 1, 2014, the ACA provides that an employer group health plan or group health insurance issuer offering employer group health insurance cannot have any waiting period (for employee coverage) that exceeds 90 days. Final regs that apply to group health plans and group health insurance issuers for plan years beginning on or after Jan. 1, 2015, clarify the 90-day rule; they provide that: (1) h no group health plan or group health insurance issuer may impose a waiting period that exceeds 90 days after an employee is otherwise eligible for coverage; and (2) all calendar days are counted beginning on the enrollment date, including weekends and holidays.

Under the final regs, a requirement to successfully complete a reasonable and bona fide employment-based orientation period may be imposed as a condition of eligibility for coverage under the plan. The final regs do not specify the circumstances under which the duration of an orientation period would be considered reasonable or bona fide. However, under new proposed regs, one month would be the maximum length of any orientation period.

For plan years beginning in 2014, compliance with either previously issued proposed regs or the new final regs would constitute compliance with the ACA’s 90-day waiting period limitation.

Numerous other tax changes will go into effect by default because a long list of business and individual tax breaks (the so-called “extender provisions”), which were extended for a year only by TIPA, expire at the end of 2014.

January 21, 2015 8:00 am