Employer Health Insurance Mandate Delayed until 2015

The Treasury Department announced yesterday that it has decided to delay the effective date of the employer health insurance mandate for one year until January 1, 2015.

Under the Accountable Care Act (ACA), employers with more than 50 employees who fail to provide affordable health insurance to their full-time employees could have faced a “shared responsibility payment” of up to $2,000 per employee starting January 1, 2014. The announcement, which is also discussed on the White House blog, delays imposition of this penalty for one year, to January 1, 2015.

While this announcement delays the employer mandate and some reporting requirements for insurers (including self-insured employers), it does not delay any other provisions under health care reform. Notably, these ACA provisions have not been postponed:

  • The “individual mandate,” requiring most individuals to obtain health insurance for themselves and their dependent children by January 1, 2014 or face penalties.
  • Various fees imposed on insurance plans and self-insured employers, starting in 2013 and 2014.
  • Ability to shop for insurance through state-run exchanges, for coverage years starting in 2014. (Cover Oregon, the Oregon healthcare exchange, will begin enrolling individuals and small employers (<50 employees) in October 2013.)
  • The small employer health insurance credits will only be available to very small employers (<25 employees) who acquire coverage through their state exchange for tax years beginning in 2014.

The delay appears to have been motivated by Treasury’s difficulty in defining reasonable reporting requirements necessary to monitor employer compliance with the law. Since the reporting rules won’t be ready until sometime this summer, Treasury and the Administration have decided to postpone the mandatory reporting for one year, to allow more time to refine and adopt the reporting mechanism. Without the reporting mechanism, the “shared responsibility payment” could not be administered; hence its delay as well.

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