Employers will have until January 2015 – an extra year – to comply with the Affordable Care Act’s employer mandate, a key provision of the law.
Under the health reform law, employers with more than 50 full-time workers are required to provide health care coverage for those workers or pay a penalty. The U.S. Treasury Department announced July 2 that it will not require employers to report on health care coverage until 2015 and therefore will not penalize those who do not comply with the law.
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The U.S. Treasury Department announced July 2 that it will not require employers to report on health care coverage until 2015.
The delay was billed by the Obama administration as a chance to simplify the reporting requirements.
"We have heard concerns about the complexity of the requirements and the need for more time to implement them effectively," Mark J. Mazur, Treasury’s assistant secretary for tax policy, wrote on the agency’s website. "We recognize that the vast majority of businesses that will need to do this reporting already provide health insurance to their workers, and we want to make sure it is easy for others to do so. We have listened to your feedback. And we are taking action."
The administration will offer proposed regulations on the insurance reporting requirements this summer. Officials plan to encourage employers to report voluntarily in 2014. "Real-world testing of reporting systems in 2014 will contribute to a smoother transition to full implementation in 2015," Mr. Mazur wrote.
The announcement created a firestorm on Capitol Hill, where ACA opponents said the move was an admission that the health reform law is bad for business and will cost jobs.
"We have all heard the warnings, and a 1-year delay does nothing to fix the law’s fundamental flaws," Rep. Fred Upton (R-Mich.), chairman of the House Energy and Commerce Committee, said in a statement. "This law will never be ready for prime time, and sadly, the administration’s acknowledgement that it still needs yet another year clearly disrupts everyone’s ability to determine what is best for them and their business."
The delay offers relief for businesses, but it does nothing for individuals because the law requires them to have health insurance on Jan. 1, 2014, said Sarah Swinehart, spokeswoman for the House Ways and Means Committee.
"The Obama administration’s decision to give corporate America a free pass on the employer mandate while continuing to force average, everyday Americans to abide by the law is deeply disturbing," she said. "The administration’s decision is an admission that this law is a failure and that we still need to lower the cost of health care for all Americans, which this job-killing law fails to do."