Proposed approach for applying the 'look-back' method when the section 4980h measurement period changes

The Internal Revenue Service (IRS) recently issued Notice 2014-49, which describes a proposed approach for determining an employee's full-time or part-time status for purposes of the employer shared responsibility rules under Section 4980H of the Internal Revenue Code of 1986, as amended, when: the employee's job within the controlled group of companies changes, and a look-back methodology is used to determine full-time or part-time status for both the old job and the new job, but different look-back methodologies are used for the old and the new job. An "applicable large employer" risks incurring penalties under the Patient Protection and Affordable Care Act if it fails to offer full-time employees (working 30 or more hours per week) qualifying health plan coverage. The guidance proposed in Notice 2014-49 is necessary because employers have flexibility in designing the look-back methodology they will use and are permitted to make changes from time to time.