Pay or Play Rules: IRS Proposes Approach for Measurement Period Changes

On Sept. 18, 2014, the Internal Revenue Service (IRS) issued Notice 2014-49, which describes a proposed approach for applying the look-back measurement method if the measurement period for a particular employee changes. This notice addresses measurement period changes resulting from the following situations:

  • An employee transfers from one position to another within the same Applicable Large Employer ALE (or ALE member), where a different measurement period is used for each position; or
  • The ALE changes the measurement period applicable to a category of employees.

ALEs may use different measurement methods (either the look-back measurement method or the monthly measurement method), or may use measurement periods that differ in length or start on a different date, for the following specified categories of employees:

  • Collectively bargained and non-collectively bargained employees;
  • Each group of collectively bargained employees covered by a separate collective bargaining agreement;
  • Salaried and hourly employees; and
  • Employees whose primary places of employment are in different states.





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The information provided is for informational purposes only and does not constitute legal advice. The information above contains only a summary of the applicable legal provisions and does not purport to cover every aspect of any particular law, regulation or requirement. Depending on the specific facts of any situation, there may be additional or different requirements. This is to be used only as a guide and not as a definitive description of your compliance obligations.