Affordable Care Act's Employer Mandate Delayed One Year
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). In response, Obama Administration recently announced it will provide an additional year before the ACA mandatory employer and insurer reporting requirements begin.
Designed to meet two goals, a means of simplifying the new reporting requirements so that they are consistent with the law; and to provide time to adapt health coverage and reporting systems while employers move toward making health coverage affordable and accessible for their employees, the extension is needed. To aid business owners, the Administration has published a formal guidance describing this transition.
According to Mark J. Mazur, Assistant Secretary for Tax Policy at the U.S. Department of the Treasury, the ACA includes information reporting (under section 6055) by insurers, self-insuring employers, and other parties that provide health coverage. It also requires information reporting (under section 6056) by certain employers with respect to the health coverage offered to their full-time employees.
“We expect to publish proposed rules implementing these provisions this summer, after a dialogue with stakeholders — including those responsible employers that already provide their full-time work force with coverage far exceeding the minimum employer shared responsibility requirements — in an effort to minimize the reporting, consistent with effective implementation of the law,” Mazur reported.
Once these rules have been issued, the Administration will work with employers, insurers, and other reporting entities to strongly encourage them to voluntarily implement this information reporting in 2014, in preparation for the full application of the provisions in 2015. Real-world testing of reporting systems in 2014 will contribute to a smoother transition to full implementation in 2015.
“We recognize that this transition relief will make it impractical to determine which employers owe shared responsibility payments (under section 4980H) for 2014. Accordingly, we are extending this transition relief to the employer shared responsibility payments. These payments will not apply for 2014. Any employer shared responsibility payments will not apply until 2015,” Mazur said. “During this 2014 transition period, we strongly encourage employers to maintain or expand health coverage. Also, our actions today do not affect employees’ access to the premium tax credits available under the ACA (nor any other provision of the ACA).”