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Health Care Reform Update: Employer Mandate Delayed Until 2015

The Treasury Department has announced a delay for a key provision in the Affordable Care Act (ACA) that would require employers with more than 50 employees to provide health insurance. In the Treasury blog posted on July 2, 2013, “Continuing to Implement the ACA in a Careful, Thoughtful Manner,” Assistant Secretary for Tax Policy, Mark Mazur wrote that the government “will provide an additional year before the ACA mandatory employer and insurer reporting requirements begin.” The original effective date for these requirements was January 1, 2014.

Due to the delay, large employers that fail to provide minimum health insurance coverage to employees will not be subject to the shared-responsibility penalty until 2015. Under the ACA an employer is considered a “large employer” for a calendar year if it employed on average at least 50 full-time employees during the preceding year.

The new effective date for these provisions will be January 1, 2015, although the government will encourage voluntary compliance in 2014. Formal guidance from the Treasury Department is expected within a week.

According to Mazur the delay will help the government achieve two goals. First, it will allow them to consider ways to simplify the reporting requirements. Second, it will provide additional time for insurers and employers to adapt coverage and reporting systems. The department is expected to publish proposed rules this summer on the reporting requirements.

The postponement of these provisions will not affect individuals’ access to premium tax credits under Sec. 36B. The mandate for individuals to obtain health insurance or pay a penalty is still scheduled to go into effect in 2014.