On July 2, the Obama Administration announced a one-year delay in the so-called “employer mandate” under the Affordable Care Act (ACA). The delay brings much-needed relief to employers who have been struggling with mountains of new guidance, and the need for yet-to-be-issued guidance, to meet the anticipated January 1, 2014 deadline.

Under the ACA, employers will be required either to provide minimum levels of health coverage to full-time employees and their dependents or to face the risk of paying penalty taxes which will subsidize the cost of employees’ premium tax credits for buying their own coverage on newly created health insurance exchanges. See our March 15, 2013, alert for a description of this requirement. Employers and insurers must comply with information reporting requirements associated with the mandate, for which no guidance has yet been provided. The delay in the effective date will provide more time for the Administration to try to streamline these requirements and for employers and insurers to implement the required reporting systems.

This delay does not impact any other ACA requirements. State and federally facilitated exchanges are still expected to open January 1, 2014, and the “individual mandate” requiring individuals to buy insurance is still expected to go into effect on the same date. See our July 11, 2012, alert for a list of effective dates of other ACA provisions. Employers that plan to use the “look-back” rules for determining their full-time employees in 2015 might need to make decisions about employee work hours and measurement periods before 2014 begins as well.

In the near future, the Administration expects to issue guidance on transition issues relating to the reporting requirements and the employer mandate.