Obama Administration Announces One-Year Delay of Employer Mandate Under Affordable Care Act

By Drew Cheney, Tax Principal
July 2013

Late yesterday afternoon, the White House and the Treasury Department both informally announced that, in effect, the Obama Administration is delaying until January 1, 2015 the implementation of the Affordable Care Act’s requirement that large employers (defined as those with 50 or more full-time employees or equivalents) provide health coverage for their employees or pay penalties.

The announcement does not affect other key provisions of the law, including, for example:

  • The implementation of the health care exchanges, which are still scheduled to start their enrollment process on October 1, 2013 with coverage taking effect on January 1, 2014.
  • The “individual mandate,” under which most Americans will be required to have health coverage on January 1, 2014 or pay a penalty.
  • The PCORI fee, which must still be paid on or before July 31, 2013 by most insured health insurance plans and sponsors of self-insured health plans.

The Treasury Department announcement indicated that the IRS will soon issue additional guidance regarding this transition relief.

There are many unanswered questions.  For example, information regarding employer-sponsored health coverage is necessary to determine individuals’ eligibility for tax credits on the exchanges and liability under the individual mandate.  It is unclear how this information will be reported, now that the reporting requirements relative to the employer mandate have been delayed.

For more information regarding these announcements and how they may affect your organization, please do not hesitate to contact the author.

This article is provided for information purposes only and should not be relied upon for legal or financial advice. We would be happy to discuss how this information impacts your business.  For more details about this matter, please contact your BNN tax professional at 800.244.7444.

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