PPACA Penalties Delayed One Year

The Obama Administration announced on Tueday that it intends to delay for one year the effective date of the employer “play or pay” penalties under health care reform, which were set to become effective in 2014. According to the press release, the Administration intends to issue formal guidance next week implementing transition rules to guide employers in implementing the reporting requirements under PPACA. These reporting requirements include information reporting by insurers and employers sponsoring self-funded plans as well information reporting by employers detailing the level of coverage the employer provides to its full-time employees among other information. Although imposition of the play or pay penalties will be delayed until 2015, the Administration is encouraging employers to voluntarily comply with the reporting requirements in order to gain “real world” testing and experience with reporting systems. The Administration’s release did not address whether it will also delay implementation of penalties under the individual mandate, which become effective in 2014. The employer play or pay mandate is meant to support the individual mandate by giving employees access to coverage that would satisfy the individual mandate. Therefore, it would appear appropriate to also delay the penalties under the individual mandate. Time will tell. In the meantime, we will continue to provide updated posts as the story develops.

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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