Health Care Employer Mandate and Penalties Delayed until 2015


Health Care Employer Mandate and Penalties Delayed until 2015

Jul 3, 2013

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Late yesterday, the U.S. Treasury Department announced a one year delay in implementation of the Affordable Care Act (“Act”) employer mandate and penalties until 2015.  The decision was announced  via a posting on the Treasury Department’s website which can be accessed HERE.  

The employer mandate, also known as the employer “play-or-pay penalty,” was scheduled to go into effect on January 1, 2014, and requires employers with at least 50 full-time equivalent employees to offer health insurance coverage to full-time employees or otherwise pay significant financial penalties.  Separate penalties may be assessed if the employer fails to offer health coverage to its full-time employees, and if the offered health coverage is not “affordable” for all employees or does not provide certain minimum value.  At this point in time, the requirement to offer health insurance to full-time employees remains intact, but penalties for non-compliance will not be assessed in 2014.

A key requirement of the Act’s employer mandate includes mandatory employer reporting to the federal government on each employee’s full-time status, access to and enrollment in health insurance, and information about the employer’s health insurance plan.  The Treasury Department cited a need to delay implementation of the required employer reporting in order to develop a simplified reporting system, and acknowledged that without this reporting system in place, the employer penalties could not be determined or enforced.  Accordingly, both the employer reporting requirements and the employer penalties are on hold until 2015.

The Treasury Department expects to publish additional guidance about the reporting system “transition” within a week, and also stated that it expects to publish proposed rules regarding the delayed employer reporting and penalties sometime this summer.  No delay has been announced for the Act’s “individual mandate” provision which requires nearly all U.S. residents to carry health insurance or otherwise pay a penalty, and which is scheduled to go into effect on January 1, 2014.

If you have questions about this matter, please contact any Robbins Schwartz labor and employment attorney. 

Nanci N. Rogers, a partner in the firm’s Chicago office, prepared this Law Alert.