On July 2, 2013, the Treasury Department’s announced that enforcement of the "Pay or Play" mandate under the ACA will be delayed until January 1, 2015. This announcement was followed by a brief notice from the IRS which states that the delayed enforcement was necessary to further refine certain reporting requirements that will now be optional for employers in 2014 but required in 2015. This development leaves employers with several choices:

• One option would be to delay current efforts to comply by 2014 and pick up the pieces again next year. Thus, employers might defer their efforts to identify their controlled group(s) and their full-time employees, and defer deciding whether to amend their health plans to cover more full-time employees or to outsource more work to staffing firms. In so doing, employers could continue their health plans without modification through 2014, subject to amending the plans to comply with health care reform design changes.

• A second option would be to proceed to comply with the "Pay or Play" mandate in 2014 as a trial run to better ensure compliance starting in 2015. The likelihood of new "Pay or Play" guidance being issued in the interim, however, may make such a trial run less useful.

• A third option would be for employers that decide not to "Play" to proceed as planned for 2014, either dropping or not expanding deficient health coverage, thereby giving employees an opportunity to experiment with coverage obtained through public health care exchanges. Even more savings than originally anticipated could be derived under this approach because the attendant penalties will not be assessed in 2014. Nevertheless, if the savings have not already been "spent" by allocation in next year’s budget, then the employer also could take this opportunity to reconsider its decision.

Moreover, regardless of the delayed implementation of the "Pay or Play" mandate, employers should remember that the rest of the ACA remains in place, so employers must still, for example: pay Patient-Centered Outcomes Research Institute fees by July 31, 2013 (at least for sponsors of self-insured health plans); issue notices explaining to employees the public health care exchange alternative by October 1, 2013; and amend their group health plans to comply with the new design features that take effect at the start of the 2014 plan year.  The Fast Laner page of our website has the more recent articles addressing employer obligations under the ACA in addition to the Pay or Play mandate.