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ACA Employer Mandate Delayed Until 2015

Jul 2, 2013

The penalties imposed by the Affordable Care Act (ACA) on large employers (50+ employees) has been delayed one year in an announcement by the Treasury Department for the Obama Administration. 

In the announcement by Mark J Mazur, Assistant Secretary for Tax Policy, he said, Over the past several months, the Administration has been engaging in a dialogue with businesses - many of which already provide health coverage for their workers - about the new employer and insurer reporting requirements under the Affordable Care Act (ACA).  We have heard concerns about the complexity of the requirements and the need for more time to implement them effectively.  We recognize that the vast majority of businesses that will need to do this reporting already provide health insurance to their workers, and we want to make sure it is easy for others to do so.  We have listened to your feedback.  And we are taking action.”  

The Administration’s announcement will provide an additional year before the ACA mandatory employer and insurer reporting requirements begin.  This is designed to meet two Administration goals.  First, it will allow consideration of ways to simplify the new reporting requirements consistent with the law.  Second, it will provide time to adapt health coverage and reporting systems while employers are moving toward making health coverage affordable and accessible for their employees. 

“We recognize that this transition relief will make it impractical to determine which employers owe shared responsibility payments (under section 4980H) for 2014.  Accordingly, we are extending this transition relief to the employer shared responsibility payments.  These payments will not apply for 2014.  Any employer shared responsibility payments will not apply until 2015,” said Mazur.  

The ACA includes information reporting (under section 6055) by insurers, self-insuring employers, and other parties that provide health coverage.  It also requires information reporting (under section 6056) by certain employers with respect to the health coverage offered to their full-time employees.  Treasury expects to publish proposed rules implementing these provisions after a dialogue with stakeholders - including those responsible employers that already provide their full-time work force with coverage far exceeding the minimum employer shared responsibility requirements - in an effort to minimize the reporting, consistent with effective implementation of the law. 

Once these rules have been issued, the Administration will work with employers, insurers, and other reporting entities to strongly encourage them to voluntarily implement this information reporting in 2014, in preparation for the full application of the provisions in 2015.  Real-world testing of reporting systems in 2014 will contribute to a smoother transition to full implementation in 2015. 

It should be noted that this action does not change the Individual Mandate requiring most individuals not covered by an Employer Group Insurance Plan to acquire individual medical insurance in 2014 of face tax penalties.  

Source: US Department of the Treasury, News Release – July 2, 2013  Continuing to Implement the ACA in a Careful, Thoughtful Manner

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