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Final rule delays ACA employer mandate

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in Compensation and Benefits

The final rule implementing the employer mandate portion of the Affordable Care Act will make it easier for most employers to comply with the health care reform law. Issued Feb. 12 by the Treasury Department and the IRS, the final rule delays the ACA’s employer mandate for mid-sized employers and rolls back compliance thresholds for large employers.

The final rule delays the employer mandate for organizations with 50 to 99 employees until Jan. 1, 2016. Mid-sized employers that want to take advantage of the extended compliance deadline must meet several certification requirements.

The employer mandate was originally scheduled to take effect Jan. 1, 2014. Last July, the administration pushed back the mandate deadline to January 2015.

Larger employers—those with 100 or more employees—must still provide coverage by Jan. 1, 2015, but to just 70% of full-time employees, not the 95% compliance rate the administration set in July 2013.

There’s no change for small employers with fewer than 50 employees, about 96% of U.S. employers according to the Treasury Department. They’re not required to offer health benefits under the ACA.

The employer mandate—also known as “play or pay” and “employer shared responsibility”—is one of the centerpieces of the ACA. It requires employers with 50 or more full-time employees to offer workers and their dependents health insurance benefits that meet affordability and coverage standards. If they don’t, the law imposes a tax penalty of $2,000 per employee per year.

The idea is to make it easy for employees to obtain health insurance, as all Americans are now required to do.

Read the final rule on the employer mandate here. Read a Treasury Department fact sheet on the final rule here.

The final rule also explains how employers should calculate their full-time employee head count.

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