Are you subscribed to the Treasury Department’s blog? Sure, it’s not on the top 10 list, but after today, you may want to consider it.
An early evening blog post by Mark Mazure, the Assistant Secretary for Tax Policy, provides a surprising but welcome reprieve for many applicable large employers. In the blog post, Mr. Mazure announced the Administration’s decision to postpone, for one year, the healthcare reform requirement that large employers provide insurance to substantially all full-time employees.
Technically, the Administration is postponing the new employer reporting requirements under the Affordable Care Act, not the requirement to offer coverage. Under the ACA, employers are required to report to the Treasury Department the health care coverage offered to their full-time employees. Practically speaking, however, this has the effect of postponing the employer mandate because without the reporting, the Administration cannot determine which employers owe shared responsibility payments under section 4980H.
The employer shared responsibility, and payments for not offering coverage to full-time employees, was set to begin on January 1, 2014. This announcement pushes that requirement out one year, starting employer shared responsibility payments in 2015. The blog post cites the complexity of the new ACA reporting requirements and the need for more time to implement them as reasons for the decision to postpone the requirements.
What can we expect next? Well, for starters, formal guidance describing this transition relief is expected to be published within the next week. Later this summer, proposed rules implementing the ACA reporting requirements are expected. After those rules are issued, employers will be “strongly encouraged” to” voluntarily implement” the information reporting in 2014 in an effort to identify any kinks in the system that may need to be worked out before full implementation in 2015.
While this news is surely welcomed by applicable large employers struggling to figure out how to comply with the employer mandate, it raises a host of questions about its effect on other provisions of the ACA. Mr. Mazur’s blog post concludes by noting that the reprieve for large employers does not forestall “any other provision of the ACA,” including the individual mandate. As things stand tonight, the Marketplaces are still scheduled to go live on October 1st and individuals are still required to have health insurance in 2014 or pay a penalty. Perhaps the Treasury blog will have more to say about that later this summer?
