Administration Announces Plan to Postpone Employer Mandate Assessments Until 2015

A Treasury Department official announced late this afternoon that the Obama administration “will provide an additional year” before certain provisions of the Affordable Care Act go into effect. According to the announcement, the one year postponement effectively will extend to assessments against employers based on failing to offer coverage to their full time employees during 2014. 

The Treasury official added that postponing these requirements “will make it impractical to determine which employers owe shared responsibility payments (under section 4980H) for 2014. 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 the announcement itself is not binding on the Treasury Department, it appears that no assessments will be made based on a failure to comply with the employer mandate in any month during 2014.

According to Penny Wofford, a shareholder in the Greenville office of Ogletree Deakins, “The Treasury announcement today provides welcome transition relief for many employers.   However, we must wait for formal guidance expected to be published this next week to determine fully the extent of the relief provided and the impact on health care reform preparation plans.”

Tom Davis, a shareholder in the Nashville office of Ogletree Deakins and co-leader of the firm’s Traditional Labor Relations Practice Group, added another cautionary note. “Employers negotiating collective bargaining agreements that will expire during or after 2015 should pay particular attention to further details regarding this development, especially if they are evaluating proposals to participate in multiemployer health plans. At best, today’s announcement only postpones important questions about employer mandate compliance in the context of collectively-bargained plan participation.”