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Employer Mandate for Healthcare Reform Delayed Until 2015

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In a decision announced on July 2, the Obama administration has decided to postpone the employer mandate for companies with 50 or more employees until 2015. The mandate was previously set to go into effect on January 1, 2014.

The mandate is now scheduled to go into effect in January 2015 for employers to offer quality affordable health insurance to employees or face a $2,000 fine per employee that receives a premium tax credit for purchasing individual coverage on a health insurance exchange.

As the impending deadline was approaching, many businesses were complaining that the reporting rules for the mandate were too complex and had requested additional time to comply. Many businesses were stressed to make hurried decisions regarding healthcare offerings to employees and to complete compliance reporting by the end of this year.

“The Administration is announcing that it will provide an additional year before the ACA mandatory employer and insurer reporting requirements begin,” wrote Mark Mazur, assistant secretary for tax policy at the Treasury Department, in a statement Tuesday. “This is designed to meet two goals. First, it will allow us to consider ways to simplify the new reporting requirements consistent with the law. Second, it will provide time to adapt health coverage and reporting systems while employers are moving toward making health coverage affordable and accessible for their employees.”

“We recognize that the vast majority of businesses that will need to do this reporting already provide health insurance to their workers, and we want to make sure it is easy for others to do so,” added Mazur.

Formal guidance on this delay is expected from the Treasury Department within the next week. The department still hopes to publish proposed rules this summer on health coverage reporting requirements for employers and insurers.

Mazur also noted that the deadline postponement will also apply to determining employer shared responsibility payments. “We recognize that this transition relief will make it impractical to determine which employers owe shared responsibility payments (under section 4980H) for 2014,” Mazur stated. “Accordingly, we are extending this transition relief to the employer shared responsibility payments. These payments will not apply for 2014. Any employer shared responsibility payments will not apply until 2015.”

While this postponement is important and will have immediately relevancy to larger employers, it does not affect any individual provisions of the ACA including employees access to premium tax credits.

If you have any questions regarding how this delay will affect your business, your healthcare planning or compliance, please call Presti & Naegele Accounting Technology Consultants to discuss. While the postponement of the employer mandate provides some immediate relief, implementation, including healthcare decisions and compliance requirements, will go into effect as planned in 2015. We encourage clients to push forward with current planning to ensure adequate time is available for planning and compliance.

IRS CIRCULAR 230 DISCLOSURE: To ensure compliance with requirements imposed by the United States Treasury, we inform you that any tax advice contained in this communication (including any attachments) was not intended or written to be used, and cannot be used, for the purpose of 1.) avoiding tax-related penalties or 2.) promoting, marketing or recommending to another party any tax-related matters addressed in this communication.