Administration Delays Affordable Care Act Employer Mandate

Puts off enforcement, penalties until 2015

Mark Mazur

WASHINGTON -- The Obama Administration will provide an additional year before the Affordable Care Act (ACA) mandatory employer and insurer reporting requirements begin, the U.S. Department of the Treasury announced on Tuesday.

It will delay until 2015 enforcement of and penalties for the requirement that all employers with more than 50 employees provide coverage to their workers in 2014. The rule already exempted small businesses with fewer than 50 full-time employees.

The Treasury Department will publish formal guidance describing the change "within the next week," Mark J. Mazur, the assistant secretary for tax policy, said in a blog post:

"Over the past several months, the Administration has been engaging in a dialogue with businesses--many of which already provide health coverage for their workers--about the new employer and insurer reporting requirements under the [ACA]. We have heard concerns about the complexity of the requirements and the need for more time to implement them effectively. 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.

"This is designed to meet two goals. First, it will allow us to consider ways to simplify the new reporting requirements consistent with the law. Second, it will provide time to adapt health coverage and reporting systems while employers are moving toward making health coverage affordable and accessible for their employees. Within the next week, we will publish formal guidance describing this transition. Just like the Administration's effort to turn the initial 21-page application for health insurance into a three-page application, we are working hard to adapt and to be flexible about reporting requirements as we implement the law.

"The ACA includes information reporting (under section 6055) by insurers, self-insuring employers and other parties that provide health coverage. It also requires information reporting (under section 6056) by certain employers with respect to the health coverage offered to their full-time employees. We expect to publish proposed rules implementing these provisions this summer, after a dialogue with stakeholders--including those responsible employers that already provide their full-time work force with coverage far exceeding the minimum employer shared responsibility requirements--in an effort to minimize the reporting, consistent with effective implementation of the law.

"Once these rules have been issued, the Administration will work with employers, insurers and other reporting entities to strongly encourage them to voluntarily implement this information reporting in 2014, in preparation for the full application of the provisions in 2015. Real-world testing of reporting systems in 2014 will contribute to a smoother transition to full implementation in 2015. 

"We recognize that this transition relief will make it impractical to determine which employers owe shared responsibility payments (under section 4980H) for 2014. Accordingly, we are extending this transition relief to the employer shared responsibility payments. These payments will not apply for 2014. Any employer shared responsibility payments will not apply until 2015. 

During this 2014 transition period, we strongly encourage employers to maintain or expand health coverage. Also, our actions today do not affect employees' access to the premium tax credits available under the ACA (nor any other provision of the ACA).​"

In a statement, the International Franchise Association said, "We applaud the administration [for providing] relief from the implementation of the Affordable Care Act," said IFA president and CEO Steve Caldeira. "This will relieve the onerous and costly burdens of the ACA for one year and allow the Administration to reexamine its implications for small businesses. We look forward to continuing our work with the Administration to ensure that the Affordable Care Act is implemented with minimal negative impact on franchise small-business owners."