Call us at (816) 743-7700

Effective Date for Certain Employer Provisions of the Affordable Care Act Postponed

The Obama Administration has announced that it is postponing for a full year, until 2015, the Patient Protection and Affordable Care Act’s (PPACA) (P.L. 111-148) mandatory employer and insurer reporting requirements. As a result of not obtaining this reporting information in 2014, the administration also announced that it will waive the imposition of any employer-shared responsibility penalty payments under Code Sec. 4980H for 2014. This effectively means that employers with more than 50 employees will not be required to provide health insurance to their employees or face a penalty until 2015.

Coming late in the day on July 2 and less than six months before these requirements were to go into effect, the Treasury Department announcement admitted that, for many employers and insurers otherwise subject to these “employer and insurer mandates,” the rules for compliance are just too complex for implementation by 2014. The announcement explained that, “we have heard concerns about the complexity of the requirements and the need for more time to implement them effectively.” The administration reported that even those businesses that already provide health insurance to employees are finding the reporting rules too complex to properly comply in time.

In its announcement, the administration promised to publish formal guidance shortly that will describe the transition that will be taking place from mandatory reporting to a voluntary system for 2014.  This is designed to meet two goals. First, it will 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.  It also expects to publish revised information reporting rules for insurers, self-insuring employers and other parties that provide health care coverage sometime during the summer, “after a dialogue with stakeholders.”  The administration is, however, encouraging employers that now provide health insurance to voluntarily implement information reporting under these revised rules in order to test their systems before mandatory reporting comes into force in 2015.

The announcement did not change the individual mandate that goes into effect in 2014 and requires most individuals to obtain health insurance or pay a penalty. Nor does it apparently delay implementation of marketplace exchanges.

For information regarding this topic, please consult Tim Ernesti, ternesti@marksnelsoncpa.com, Joe Wondra, jwondra@marksnelsoncpa.com, or your MarksNelson professional at 816.743.7700.

About the Author

Tim Ernesti and Joe WondraView all posts by Tim Ernesti and Joe Wondra