As you are aware, under the Affordable Care Act, certain employers (generally, those who employ 50 or more full-time employees and full-time equivalent employees) will be subject to penalties if they do not provide health coverage to their employees (the so-called “pay or play” penalties, or “shared responsibility” payments). In addition, employers who provide health coverage must comply with new reporting requirements. Both of these requirements were scheduled to become effective on January 1, 2014.
On July 2, 2013, the Administration announced that it will delay the employer shared responsibility payments and the mandatory reporting requirements for one year. Accordingly, transition relief is being provided to January 1, 2015. In the meantime, the Administration will be considering ways to simplify the reporting requirements, and will issue proposed rules later this summer. During the transition period, employers are strongly encouraged to voluntarily implement the reporting requirements, and are encouraged to maintain or extend health coverage.
The transition relief does not affect employees’ access to the premium tax credits, nor does it delay certain other health care reforms that are scheduled to take effect on January 1, 2014. More detail about the transition relief will be coming in the next few weeks, but we wanted you to be aware of this important development today.