Affordable Care Act's Employer Mandate Goes to the Waiting Room

The Obama Administration announced on July 2, 2013 that the employer mandate under the Patient Protection and Affordable Care Act (Affordable Care Act) will be delayed until 2015, thus giving employers an extra year to comply with the law’s complicated hours-tracking and health insurance reporting rules.

Under the Affordable Care Act, an employer with 50 or more full-time equivalent employees is liable for monetary penalties if the employer does not offer affordable, minimum value health care coverage to a full-time employee and that employee obtains subsidized health care coverage from a health insurance exchange. Under yesterday’s announcement, those penalties, along with the insurance reporting requirements imposed on employers under the Affordable Care Act, will not be enforced against employers until 2015.

The delay means that employers will have an additional year to offer health insurance coverage to their full-time employees before the Internal Revenue Service (IRS) will assess penalties, known as the employer shared responsibility payment. Employers also will have an additional year to comply with the information reporting provisions required under the Affordable Care Act. These provisions require employers to provide information to the IRS regarding the health insurance coverage offered to their full-time employees. That information will, in part, determine whether those employees are entitled to subsidized health insurance and whether employers are liable for an employer shared responsibility payment. Proposed rules on these reporting requirements are expected to be published later this summer.

The announcement does not delay the effective date for other provisions of the Affordable Care Act, such as the requirement that individuals purchase health insurance or pay a penalty.

Official guidance on this transition relief will be published within the next week, according to the Treasury.

The announcement on the Treasury website is available here.

The announcement on the White House website is available here.