The Obama administration has decided to wait a year before requiring organizations with 50 or more full-time employees to provide health insurance benefits under the Affordable Care Act (ACA) health care reform law.
The postponement—which pushes the employer mandate back to Jan. 1, 2015—is designed to “provide time to adapt health coverage and reporting systems while employers are moving toward making health coverage affordable and accessible,” according to a July 2 statement by Mark J. Mazur, the Treasury Department’s assistant secretary for tax policy.
What it means: Employers won’t pay IRS penalties if they don’t offer health insurance benefits next year.
Mazur said the administration would shortly release official guidance on the transition to the new deadline.
The delay is a not-so-tacit acknowledgment that the ACA is proving hard to implement, especially parts of the law requiring employers to report their compliance efforts—and the IRS to penalize those that don’t comply.
“We have heard concerns about the complexity of the requirements and the need for more time to implement them effectively,” Mazur said. “We recognize that the vast majority of businesses that will need to do this reporting already provide health insurance to their workers, and we want to make sure it is easy for others to do so.”
The administration promised to work with employer groups to simplify ACA record-keeping and reporting requirements. Mazur said he expects final reporting requirements to be issued this summer.
In the meantime, the administration said it hopes employers won’t back off efforts that are already under way to provide the kinds of benefits the ACA envisions.
“Once these rules have been issued, the administration will work with employers, insurers and other reporting entities to strongly encourage them to voluntarily implement this information reporting in 2014, in preparation for the full application of the provisions in 2015,” Mazur said.