IRS Guidance Released on the Delayed Implementation of the Affordable Care Act's Play or Pay Rules - Penalties Will Not Apply to Large Employers That Do Not Offer Health Coverage in 2014


On the heels of last week’s announcement that the Affordable Care Act’s (ACA) reporting requirements and Play or Pay penalties will not go into effect until 2015, the IRS has released transition relief clarifying that the delayed implementation is restricted solely to these provisions. The individual mandate, eligible individuals’ access to premium tax credits, the PCORI and transitional reinsurance fees, and all other ACA provisions will take effect as originally scheduled.

Providers of minimum essential coverage, such as insurance companies and self-insuring employers, are required to report certain information to the IRS each year. In addition, all large employers subject to the Play or Pay rules must provide certain information to the IRS on an annual basis. These requirements were originally scheduled to go into effect in 2014, but have been delayed one year to allow additional time for simplification of the reporting requirements and to give those required to report information additional time to prepare. Proposed rules are expected to be released this summer, and the transitional relief encourages voluntary compliance with those rules in 2014.

The information large employers must report each year makes it possible for the IRS to determine if the employer is subject to the Play or Pay penalties. Due to the delayed implementation of this requirement, the Play or Pay penalties also had to be delayed until 2015. Though the transition relief encourages employers to maintain or expand health coverage in 2014, no Play or Pay penalties will be assessed for 2014. As such, all large public and private employers that do not offer affordable coverage providing minimum value to full-time employees in 2014 will not be subject to the Play or Pay penalties if one or more full-time employees enroll in a health plan through the Exchange and receive a premium tax credit or cost-sharing reduction.

Written by:

Published In:


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Best Best & Krieger LLP | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »

All the intelligence you need, in one easy email:

Great! Your first step to building an email digest of JD Supra authors and topics. Log in with LinkedIn so we can start sending your digest...

Sign up for your custom alerts now, using LinkedIn ›

* With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name.