What are the Implications of the ACA Employer Mandate Delay?

Under the Affordable Care Act of 2010, employers with 50 or more employees were required to provide health insurance to their workers or pay a penalty. This provision was set to kick in on January 1, 2014. However, earlier this month, the Obama Administration announced that this mandate would be delayed for one year. The reason for the delay is twofold; first, many businesses were expressing concerns that the requirements were unclear and they were not sure what they were supposed to do. Second, the Administration was behind on some of the implementation of the mandate.

Barack Obama signing the Patient Protection an...
Barack Obama signing the Patient Protection and Affordable Care Act at the White House (Photo credit: Wikipedia)

There is some confusion about what this delay means for affected businesses. It should be noted that the mandate itself is not being delayed, that would require an act of Congress, which the Administration did not seek. Instead, they are delaying the reporting requirements for compliance with the mandate, and thus, any penalties for being out of compliance. In other words, the law has not changed; the IRS is just waiting an additional year to enforce it.

For businesses, this is a welcome reprieve from the rapidly approaching compliance deadline. The government is still encouraging businesses to voluntarily implement and/or expand their health insurance coverage for employees so they are ready when the reporting requirements under IRS Code Section 4980H take effect in January 2015. Administration officials have also declared that there will be no further delays in the implementation of the employer mandate so businesses would be wise to use this extra year to ensure that they are in compliance when the time comes.

One other thing to note is that as of late July 2013, the employer mandate is the only major part of the ACA that is delayed. Though many in Congress have been calling for a delay in the individual mandate, it is slated to go into effect as scheduled. This means that the health insurance exchanges should be up and running by October 1, 2013. Therefore, if an employee meets certain eligibility guidelines and does not have adequate coverage through an employer, they would be eligible to purchase health insurance from the exchanges.

Whether or not this scenario would require an employer to file reports with the IRS even during the period when the mandate is supposed to be delayed remains to be seen. As always, talk with your accountant for the most up-to-date information on the ever-changing provisions of the Affordable Care Act.


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