obamacare mandate postponed

Employers can breathe a massive sigh of relief. Perhaps the biggest, and most confusing, requirement under President Obama’s healthcare reform law has been delayed until after the midterm elections.  

The Treasury Department just announced the new employer and insurer reporting requirements — and the accompanying penalties — under the law will be delayed until 2015. The reporting requirements are what make enforcement of the employer mandate to provide full-time workers with affordable health insurance possible.

So, in effect, the employer “play-or-pay” requirement is being delayed until 2015.

The feds say this is a reaction to the concerns businesses have raised about the reporting requirements being too confusing and complex to implement properly before the start of 2014, when the employer mandate was originally scheduled to begin.

The Obama Administration says the delay will accomplish two goals:

  • “It will allow us to consider ways to simplify the new reporting requirements,” and
  • “It will provide time to adapt health coverage and reporting systems while employers are moving toward making health coverage affordable and accessible for employees.”

Not a lot of specifics have been released about how the transition from a 2014 to a 2015 employer mandate start date will work, but the administration said it’ll publish formal guidance within the week.

And once the guidance is issued, the administration says it’ll work with and encourage employers and insurers to get them to voluntarily implement the revised reporting requirements in 2014 to prepare for compliance in 2015.

But all shared responsibility requirements — and penalties — will not be enforced until 2015.

Individual mandate still in place

This, undoubtedly, will all come as good news for employers, as they now have another year to get their ducks in a row to make sure they come into compliance with Obamacare’s employer mandate — assuming they decide to offer coverage and not pay the shared responsibility penalty.

But for individuals, especially those not currently receiving health benefits (and those currently receiving “substandard” benefits), the news may not be well received.

Despite the delay in enforcing the employer mandate to provide workers with coverage, enforcement of the individual mandate — which requires most Americans to carry health insurance or pay a penalty — remains slated for 2014.

Of course, that could be delayed as well — House Speaker John Boehner (R-OH) has already urged the White House to do so. But for the time being, it remains — and it raises a number of interesting questions.

For starters:

  • Can the government really expect to punish individuals for failing to purchase insurance on their own if employers won’t be punished for not offering it?
  • What happens to those employees who’re offered employer-sponsored coverage that’s “substandard” — in other words, it fails to meet Obamacare’s minimum essential coverage requirements? Will they have to drop their employer’s plan to buy a plan that meets the law’s minimum coverage requirements to avoid a non-compliance penalty?
  • The treasury said premium tax credits designed to help the uninsured afford coverage will still be available in 2014. But how will they be funded now that employers won’t be funneling shared responsibility payments into the system?

We’ll keep you posted as this story develops.

This post was originally published on our sister website, HRBenefitsAlert.com.

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