The White House has decided to delay implementation of the Employer Mandate provision, a key component of the Patient Protection and Affordable Care Act (the “ACA”) until 2015. The Employer Mandate provision, which was slated to become effective January 1, 2014, requires employers with 50 or more employees to offer coverage to employees or pay a penalty. The delay in implementation is attributed in large part to employers’ concerns about the challenges of looming deadlines and the lack of clear guidance from the government, including with respect to employer reporting requirements.
The employer penalty provisions of the ACA that have now been delayed for a year will affect employers with 50 or more full-time employees that do not offer insurance coverage. Those penalties under the ACA require that such employers pay a penalty of $2,000 per full-time employee, excluding the first 30 employees. The penalties apply if at least one employee receives subsidized health coverage through newly created Exchanges offering health insurance to individuals. Additionally, even if an employer does offer health insurance coverage, if that coverage does not meet federal standards, the employer may also be subject to a penalty that could amount to $3,000 for each employee who acquires subsidized coverage on the Exchanges rather than accept the employer offered coverage.
Despite the fact that employers will be given a reprieve from the Employer Mandate until 2015, this delay does not affect the individual mandate, which will become effective January 1, 2014. Some individuals may pay penalties starting in 2014 if they choose to go without health insurance.
Official regulatory guidance is expected later this week. We will keep you informed of the developments.
Obermayer attorneys are available to answer your questions and help to ensure that your company is in compliance with the requirements of the ACA.
The information contained in this publication should not be construed as legal advice, is not a substitute for legal counsel, and should not be relied on as such. For legal advice or answers to specific questions, please contact one of our attorneys.