OUR THOUGHTS ON:

Employer Healthcare Mandate Postponed

Affordable Care Act (ACA)|Tax

By Jim Gilboy

Under the heading “Continuing to Implement the ACA in a Careful, Thoughtful Manner” the Obama administration released the following statement:

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 is announcing that it will provide an additional year before the ACA mandatory employer and insurer reporting requirements begin. This is designed to meet two goals. First, it will allow us to consider 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. Within the next week, we will publish formal guidance describing this transition.

This announcement came a less than 6 months before the requirements were to go into effect on January 1, 2014. This means that mandatory employer and insurer reporting requirements have been delayed until 2015. As a result of not obtaining this reporting information in 2014, the administration also announced that it will waive the imposition of any employer-shared responsibility penalty payments. This effectively means that employers with more than 50 employees will not be required to provide health insurance to their employees or face a penalty until 2015.

As a practical matter most employers subject to the mandate already offer insurance. The reasons that those employers offer insurance will continue to exist: recruitment and retention of employees, the tax favored treatment of health insurance as a fringe benefit and reduced absenteeism when employees are healthy. 

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