Health Care Mandate Delayed ONLY for Large Employers

Delay in Health Care Mandate

The Treasury Department has announced a one-year delay in the enforcement of the “pay-or-play” rules for large employers under the Patient Protection and Affordable Care Act (ACA). The law required “large” employers (50 or more full-time or full-time equivalent employees) to offer subsidized health insurance to their full-time employees beginning Jan. 1, 2014, or pay substantial tax penalties. That requirement will now be effective Jan. 1, 2015. However, many other rules and requirements will continue to apply as originally scheduled.

These rules require applicable large employers to offer full-time employees (and their dependents) the opportunity to enroll in an employer-sponsored health insurance plan that provides employees with certain minimum coverage. With respect to the employee (not to dependents), the coverage must offer “minimum value” at an “affordable” cost.

Citing the administrative difficulties associated with these rules, the Treasury has delayed the effective date one year – from Jan. 1, 2014, to Jan. 1, 2015. However, many other rules remain in effect.

The decision by Treasury to delay the implementation of the pay or play rules for large employers does not delay any other part of the ACA. In particular, the individual mandate to purchase insurance or pay tax penalties, the insurance marketplaces, and the potential tax credit subsidies for certain individuals meeting various income, family size, and coverage requirements are not delayed. Other rules, requirements and taxes that could be important to employers will also remain in effect.

At the present time, employers that don’t meet the “large” employer definition are not impacted by this change. We recommend you continue with proactive planning in this area. Additional changes are certainly possible and we will update you as they occur.

Please contact us if you have questions.