Obama Administration Delays Employer Mandate for Affordable Care Act

By:  |  Category: Blog Friday, July 12th, 2013  |  No Comments
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The Internal Revenue Service has delayed the employer mandate provision and information reporting requirements of the Affordable Care Act for one year. The decision allows larger employers additional time to comply with the law.

The requirements will now begin in January 2015 for employers with 50 or more full-time employees (or the equivalent in full- and part-time employees) to offer quality affordable health insurance to employees or face a $2,000 fine per employee if the employee receives a premium tax credit for purchasing individual coverage on one of the upcoming health insurance exchanges.

The law requires a complex set of reporting for businesses, many of which already are struggling with numerous other requirements. And the mandate itself, which exempts employers with fewer than 50 full-time employees, creates an incentive for some businesses to move employees to part-time work. The delay is welcome news to many of those companies impacted, analysts say.

The IRS said in its Notice 2013-45 that the transition relief will provide additional time for input from employers and other reporting entities in an effort to simplify information reporting consistent with effective implementation of the law. “This transition relief also is intended to provide employers, insurers and other providers of minimum essential coverage time to adapt their health coverage and reporting systems,” said the IRS. “Both the information reporting and the Employer Shared Responsibility Provisions will be fully effective for 2015. In preparation for that, once the information reporting rules have been issued, employers and other reporting entities are encouraged to voluntarily comply with the information reporting provisions for 2014.”

The Obama administration emphasized that the delay came in response to demands from businesses to provide more time to adjust to the new requirements.

The IRS added that the transition relief through 2014 for the information reporting and Employer Shared Responsibility Provisions has no effect on the effective date or application of other Affordable Care Act provisions. The law’s individual mandate, for example, is still intact and will require most Americans to have health coverage or pay a fine starting at $95 per adult next year.

The Obama administration still plans to open the health insurance exchanges, or marketplaces, on October 1. It recently shortened the 21-page application for health insurance into a three-page application to make it easier for taxpayers to apply for coverage. Health insurers around the country already have designed and priced health plans to meet new standards that require them to cover a basic set of benefits. California and several other states already have published premiums.

House Republicans have introduced legislation once again to try to repeal the Affordable Care Act and have begun pushing the Obama administration to delay the individual mandate for buying health insurance now that the employer mandate has been delayed.

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