The Obama administration announced July 2nd that it will postpone the mandatory compliance date for employers to provide health insurance under the Affordable Care Act (the “ACA”).
The ACA, a sweeping piece of health care reform legislation, provides a host of requirements related to health insurance. Significant to employers, the legislation’s “shared responsibility” mandate requires that those employing 50 or more “provide affordable health insurance that provides minimum value” to “full time employees” (defined as employees working 30 hours or more per week). The employer mandate was originally scheduled to go into effect on January 1, 2014.
However, in a statement posted to the official White House Blog Tuesday afternoon entitled “We’re Listening to Businesses about the Health Care Law,” the administration expressed that it will seek to cut “red tape” and simplify the reporting process regarding an employer’s “shared responsibility” obligations under the ACA.
In light of these forthcoming changes, the White House also announced that it will grant employers an additional year to be in compliance with legislation, pushing the shared responsibility mandate’s compliance date from January 1, 2014 to January 1, 2015. The delay regarding the employer mandate does not affect any other ACA compliance date, and the White House’s statement affirmed the administration is moving “full steam ahead” to begin allowing individuals and small businesses to purchase health insurance through its “Health Insurance Marketplace” on October 1, 2013 as originally scheduled.
Although this announcement grants a reprieve for employers, penalties for non-compliance have only been pushed into the not-too-distant future. As such, employers of 50 or more should be mindful of their emerging responsibilities under the ACA and should have an understanding of the consequences of non-compliance.