Play-Or-Pay Tax Penalties Under Affordable Care Act Will Not Apply Until 2015, Treasury Department Announces


The U.S. Department of the Treasury announced today that after hearing and considering the concerns of employers about the complexity of compliance with the Play-or-Pay requirements under the Affordable Care Act, it is postponing the mandatory employer and insurer reporting requirements until 2015.  Recognizing that without the reporting requirements it is impractical to determine which employers will be subject to the Play-or-Pay tax penalties, the Department is also delaying the effective date of those penalties, originally effective on January 1, 2014, until 2015.  Transition guidance is expected to be published within the next week.

The Department also expects to publish proposed rules this summer to implement the reporting requirements.  Compliance, although voluntary in 2014, is strongly encouraged in order to work through and test the reporting systems in preparation for full compliance required in 2015.  The Department noted that this delay does not affect employees’ access to any of the Affordable Care Act’s premium subsidies.  In addition, the White House clarified on its blog that the Exchanges, sometimes referred to as Marketplaces, are on target to open on October 1, 2013.

The delay of the Play-or-Pay penalties and employer reporting requirements will not affect other provisions of the Affordable Care Act.

In light of this announcement, we have three suggestions for employers working on Affordable Care Act compliance:

  • Make sure your health plans are, or will be, in compliance with all of the Affordable Care Act requirements other than Play-or-Pay and employer reporting by the respective compliance dates;
  • Watch for the additional guidance that will be coming this summer; and
  • Contact counsel if you have any questions on Play-or-Pay penalties or related issues.

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.

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