The Obama administration plans to delay for a year the Affordable Care Act’s requirement that businesses with 50 or more employees provide health care coverage. Before the announcement, the requirement was scheduled to take effect January 1, but now it will not kick in until 2015.
The administration stated that the business community’s concerns over the complexities of implementing the new law prompted the decision. Once the requirements are in place, businesses that fail to comply will face tax penalties. Businesses with less than 50 employees are exempt from the rule. The postponement will allow businesses to bring technology up to date, determine coverage costs, and become familiar with compliance issues. The Treasury Department encourages businesses to begin voluntarily reporting next year in order to be better prepared for 2015.
In the meantime, other aspects of the Affordable Care Act will take effect on schedule. For instance, the portion of the law requiring individuals to have insurance, popularly known as the “individual mandate,” will take effect on January 1 of next year. The new health care exchanges from which individuals can purchase that required coverage will open October 1 of this year.
A statement by Assistant Secretary for Tax Policy Mark Mazur is available at the U.S. Treasury’s blog.