The Obama Administration has announced the delay of the employer mandate/pay-or-play provisions under the Patient Protection and Affordable Care Act (ACA) until January 1, 2015. Previously, employers with 50 or more full time equivalent employees were required to offer affordable health insurance to employees working more than thirty hours a week by January 1 or pay a “penalty” to the IRS. A $2,000/per employee penalty results when an employee receives a premium subsidy when purchasing coverage on one of the health insurance exchanges.
Presumably, the goal of the delay is to allow the federal government to simplify the various reporting requirements associated with the employer mandate and allow employers to better understand and prepare for its impact. Unfortunately, procrastination seems to be the norm when employers are faced with difficult decisions, and only time will tell if employers use this additional time wisely.
It is important to note that this new effective date only relates to the employer mandate and not the many other ACA requirements.
Employers of all sizes should continue to work with their advisors to get an understanding of the new world of healthcare reform so that they and their employees are prepared to deal with the impact. Putting one’s head in the sand will only be an impediment to business growth and employee awareness.
If you should have any questions about the new effective date for the employer mandate or the ACA in general, please contact Mark Flanagan of Aronson’s Employee Benefit Plan Services Group at 301.231.6257.