Health Care Reform Update: Employer Shared Responsibility Provisions Delayed Until 2015; Other Provisions on the Horizon


On July 10, 2013, the IRS issued a formal notice delaying the effective date of the employer shared responsibility provisions under the Patient Protection and Affordable Care Act (“PPACA”) until January 1, 2015 (or later, for certain fiscal-year plans).  These provisions, commonly referred to as the “pay or play mandate,” impose a penalty on large employers who fail to offer health coverage to their full-time employees or who offer health coverage that does not meet PPACA’s affordability or minimum value requirements.  This was welcome news to large employers, many of whom were struggling to meet the deadline due to the complex regulations and guidance issued to date, as well as administrative limitations and cost concerns.

It is important to note that this delay does not impact the PPACA “individual mandate” (the requirement that each individual obtain health coverage or pay a penalty) or the availability of health coverage through state health insurance exchanges.  In addition, employers should be aware that the delay does not impact other PPACA provisions which are scheduled to be effective later this year and in 2014.  Some of these other PPACA provisions include:

  • PPACA Health Insurance Exchange Notice: This notice must be distributed to all employees by October 1, 2013.
  • 90-Day Waiting Period Limitation: Plans cannot impose a waiting period that exceeds 90 calendar days effective for plan years beginning on or after January 1, 2014.
  • Prohibition of Pre-existing Condition Exclusions: Plans cannot impose any pre-existing condition exclusions effective for plan years beginning on or after January 1, 2014.
  • No Annual Limits: Plans cannot impose annual limits on the dollar value of benefits for plan years beginning on or after January 1, 2014.