The Obama administration announced Tuesday plans to delay by one year the enforcement
The delayed requirement in the Affordable Care Act calls for employers with 50 or more employees to provide full-time workers with affordable health insurance by 2014 and to report it to the federal government, or face penalties (the pay of "pay or play").
The requirement was delayed because of employers' concerns over the new reporting requirements about employees' health insurance data. ACA calls for employers to report workers' access to and enrollment in health insurance. This is a major undertaking for employers that involves new calculations about who is considered full time, determining at what point employees have to be offered coverage, the value of the coverage, and packaging it all to submit to the federal government.
In announcing the delay of the pay or play health care reform penalty, an Obama advisor said, "We will convene employers, insurers, and experts to propose a smarter system and, in the interim, suspend reporting for 2014." In a related announcement, the Treasury Department said that following talks with stakeholders, the administration will publish proposed reporting guidelines this summer.
It is unclear how the administration will revise the requirements, but for now, employer shared responsibility payments (the pay or play health care reform penalties) cannot be assessed without the employee health insurance data. As a result, payments won't apply to 2014.
What does this mean for employers that were on track for ACA compliance? This announcement isn't particularly impactful for those businesses. The administration still is strongly encouraging employers to maintain affordable coverage and to establish and test reporting systems in 2014.
For employers that have been slow to get compliant, they now have more time to get on the right track toward what appears to be inevitable. The administration is expected to publish proposed rules for reporting later this summer to ease the requirements, consistent with effective implementation of the law.
Other provisions of the law — such as the launch of the public health insurance marketplace in October — for now remain on track for implementation.
The U.S. Treasury Department announcement indicates that formal guidance about the delay, and the associated transition period, will be published within the week. We will continue to update you as additional information becomes available.
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