Employers facing the challenge of deciding how to comply with the Affordable Care Act’s January 1, 2014 health insurance mandate have received a reprieve.
Under the mandate, employers with 50 or more full-time equivalent employees must provide their full-time employees with a minimum level of health insurance or face fines. Companies close to the 50 full-time equivalent employee threshold have been facing especially tough choices this year.
On July 2, the Treasury department announced it would delay the implementation of the employer mandate one year, to January 1, 2015.
Mark J. Mazur, Assistant Secretary for Tax Policy at Treasury, said that the delay “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.”
In addition, the Administration indicated it will work with employers to voluntarily implement this information reporting in 2014 – in effect, engage in real-world testing before the formal program is implemented in 2015.
The delay does not affect the other provisions of the Affordable Care Act, including the establishment of health care marketplaces and the individual mandate affecting employees. It simply gives organizations one more year to figure out their options before the employer mandate goes into effect on January 1, 2015.
The decision to pay the fine in 2015 or provide insurance for your workforce continues to be complex and dependent on the size and the type of your workforce.
The Administration has indicated that it will soon release details on the implementation of the delay. We will monitor the upcoming guidance and provide information as it becomes available.