Tuesday, July 2, 2013

Employer Mandate Requirement Under ACA Delayed Until 2015


White House Delays Employer Mandate Requirement Under ACA 
The U.S. Department of the Treasury announced today that the Obama administration won't be penalizing businesses that do not provide health insurance to their workers in 2014.  Instead, enforcement of ACA's requirement that employers with more than 50 employees provide coverage to their workers will be delayed until 2015.

The Obama administration said the move recognizes that the reporting requirements -- the steps businesses must take to show compliance -- are complex and that the administration will try to streamline them over the next year.  So, there will be no penalties the first year on large employers.  Small businesses with fewer than 50 workers already were exempt.

This surprise announcement does not affect other central provisions of the health care reform law, including the establishment of health care marketplaces where Americans without employer-based health insurance can shop from a menu of insurance policies.  Under those provisions, federal subsidies will be available for lower-income individuals (under 400% of the Federal Poverty Limit, which translates to about $46,000 annual income for a single person or $94,000 for a family of four).

It’s unclear what impact today's announcement will have on ACA's goal of providing coverage to uninsured Americans.  Workers whose employers do not offer coverage, and now have one more year to do so, seemingly will need to shop the individual market to get coverage next year.  Anyone seeking a federal subsidy will need to shop on the state exchanges; but for those not seeking a federal subsidy in 2014, individual health insurance can be purchased on or off the exchanges.

Here is today's announcement from the Treasury Department, posted by Mark J. Mazur, Assistant Secretary for Tax Policy at the U.S. Department of the Treasury.

Until next time,

Andrew Herman, President
AH Insurance Services, Inc.