IRS and Treasury Department Announce Employer Mandate Relief for Employers of Volunteer Firefighters and Emergency Medical Personnel


The IRS and the Treasury Department have announced interpretive guidance that exempts employers from counting the hours of volunteer firefighters and emergency medical personnel when determining their compliance obligations under the employer mandate provisions of the Patient Protection and Affordable Care Act (“ACA”).


Employer Mandate

The “employer mandate” or “employer responsibility rule” is the portion of the ACA that requires “employers who employed at least 50 full-time employees, including full-time equivalent employees, on business days during the preceding calendar year” to offer affordable and adequate health insurance to all full-time employees. The employer mandate is set to go into effect January 1, 2015, with applicable employers who fail to meet the employer mandate requirements subject to monthly penalties. As of today’s date, the IRS has only issued proposed regulations regarding the employer mandate, with final regulations expected to be published in early 2014.


Calculating Full-Time Equivalent Employees

According to the proposed regulations, in order to determine whether an employer is required by the ACA to offer insurance to its full-time employees, each employer must determine if its total of full-time employees and full-time equivalent employees (FTEs) meets or exceeds 50, with any such employer meeting the threshold deemed a “large employer” subject to such compliance obligations. To calculate an employer’s FTEs, the employer generally, subject to certain additional variables, adds up all of the hours worked in one calendar month by part-time employees and divides that number by 120. For example, if an employer had 20 parttime employees who worked a total of 1,200 hours in one month, the employer would be considered to have 10 FTEs. If that same employer had 40 or more full-time employees, it would, by virtue of the addition of the 10 FTEs, qualify as a “large employer” under the ACA and be required to offer health insurance to its full-time employees or pay certain penalties.


Application to Volunteer Firefighters and Emergency Medical Personnel

In response to the proposed regulations, the IRS received many comments suggesting that “the employer responsibility rules should not count volunteer hours of nominally compensated volunteer firefighters and emergency medical personnel in determining full-time employees (or full-time equivalents).” Certain members of Congress, including U.S. Rep. Lou Barletta, pressured the Treasury and IRS regarding these same concerns.

In response, the Treasury and IRS announced on January 10, 2014, that “the forthcoming final regulations relating to employer shared responsibility generally will not require volunteer hours of bona fide volunteer firefighters and volunteer emergency medical personnel at governmental or tax-exempt organizations to be counted when determining full-time employees (or full-time equivalents).”

Therefore, to the extent any governmental or tax-exempt organization has calculated its FTEs for ACA employer mandate compliance purposes, this calculation should be recomputed with all volunteer hours of bona fide volunteer firefighters and volunteer emergency medical personnel, whether or not such volunteers are paid a nominal amount, excluded from such calculation.



The ACA, and how it affects employers, will continue to evolve as more provisions are implemented or delayed. We will send out additional Legal Alerts as this area of law develops. Should you have any questions about ACA implementation or compliance, please do not hesitate to contact Janis L. Adams, Kate Flewelling or any member of Smith Haughey Rice & Roegge’s Labor and Employment practice group.