Affordable Care Act

The Basic Facts

Multi-Employer Plans (Union/Guild Plans)

Recently, the IRS has offered transitional rules specific to multi-employer plans (i.e. plans offered by unions/guilds in which production companies pay into for its union employees) for at least 2014. For employers that contribute to multi-employer plans, there will be no penalty if:

  1. the employer is required to make contributions to a multi-employer plan pursuant to a collective bargaining agreement or participation agreement for employee;
  2. the plan offers coverage to the employees and their dependents; and
  3. the coverage is affordable and provides minimum value.

Additionally, the plan must comply with the ACA’s requirement that administrative periods for eligibility be less than 90 days. The administrative period limitation and full-time status determinations may be particularly troubling for multi-employer plans. Unlike single-employer plans, which have direct access to information about the employees, many multi-employer plans are required to use employer reports that may not be submitted until weeks after the hours are worked. Unless plans institute automatic enrollment with the ability to opt-out, they could face delays in determining whether particular employees should be treated as full-time. The IRS recently corrected the proposed multi-employer transition rule to specify that a compliant offer of coverage occurs if the employee falls within the group entitled to coverage upon satisfying plan eligibility conditions.