The Obama Administration, through the U.S. Department of Treasury, recently announced that it was delaying implementation of key provisions of the Affordable Care Act (“ACA”) for a year. Originally scheduled to go in effect on January 1, 1014, the shared responsibility provisions of the ACA would subject employers with 50 or more full time employees (or full time equivalents) to annual penalties for failing to provide affordable health coverage to their employees or providing coverage for employees that did not cover the majority of costs of their care.
These employers, as well as insurers and self-insured employers were also subject to insurance reporting requirements that were to begin in January. The Administration does not expect the delayed implementation of these provisions of the ACA to affect the implementation of the health insurance exchanges that are set to go live on October 1st or employees’ access to health insurance premium tax credits otherwise available under ACA.
According to Mark Mazur, the Assistant Secretary for Tax Policy at the Department of Treasury, the implementation date for these requirements has been delayed because of concern over the “complexity of the requirements and the need for more time to implement them effectively.” Valerie Jarrett, Senior Advisor to President Obama furthered commented on the White House blog that the delay is intended to cut the red tape by simplifying the reporting process and to provide employers with more time to comply with the rules. The delay provides employers and insurers the opportunity to test their reporting systems prior to full implementation in 2015.
While the employer reporting obligations are not mandatory until 2015, the Administration is encouraging employers to nonetheless voluntarily implement information reporting during the transition year.
The Administration expects to continue to meet with employers and other stakeholders to develop a more straightforward and streamlined process, which will likely result in additional official guidance in the coming weeks, and new regulations later this summer.
Employers and other stakeholders affected by the delay will need to monitor these developments in refining their implementation strategies.