What The Delay In The ACA Employer Mandate Means For You

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On Monday, the Obama Administration announced that for the second time in a year, employers with 50 or fewer employees will have extra time — until January 1, 2016 — before they are required to offer health insurance to almost all their full-time workers. Initially, the employer mandate was to take effect on January 1, 2014, but last summer, the Obama Administration delayed that deadline until January 1, 2015 for all employers.

This new extension, announced by the Treasury Department, applies only to employers with 50 to 99 employees.  The Treasury Department did announce some changes for larger employers as well.  Employers with 100 or more employees are will be required to offer suitable coverage to 70 percent of employees by January 1, 2015, rather than 95 percent which is what the ACA previously required.

With this change, the employer mandate (often called the “shared responsibility” mandate), now applies as follows:

  • Employers with less than 50 employees: These employers are not required to provide coverage or complete any tax returns under the ACA.

  • Employers with 50 to 99 employees:, These employers will need to report to the IRS in 2015 about the insurance offered to their full-time employees, but will not be subject to a mandate until January 1, 2016.

  • Employers with 100 or more employees: As a result of these changes, these larger employers will only need to provide 70 percent of full-time employees with coverage as of January 1, 2015, but that percentage will rise to 95 percent on January 1, 2016.

It is not at all clear whether this is the last change we will see from the Obama Administration.  In the past, Administration officials have cited two reasons for delaying ACA deadlines: the Treasury Department’s lack of readiness to enforce the law and the burden it expects the law to impose on employers.  With the embarrassing hiccups with the healthcare.gov website and the President’s false campaign promise that “if you like your plan, you can keep it,” it is hard to imagine that the Administration would want to delay ACA deadlines any further.  But, the Administration has appeared ill-equipped at times to enforce its signature law, so the future of any deadlines remains to be seen.

One thing is for sure: the ACA is a very complicated law — one which the most well-intentioned employers could easily violate.   

Topics:  Affordable Care Act, Delays, Pay or Play, Shared Responsibility Rule

Published In: Health Updates, Labor & Employment Updates, Tax Updates

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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