Provision of New Health Care Law Postponed One Year

July 3rd, 2013 by DWM Magazine

Employers will no longer be required to provide health care coverage to employees starting January 1, 2014, as part of the Affordable Care Act (ACA). According to reports from the Chicago Tribune, one of the key provisions of ACA has been delayed by the Obama administration, pushing back the effective date for employee coverage to 2015.

In a post published on the U.S. Department of Treasury’s website July 2, assistant secretary for tax policy Mark J. Mazur said that after listening to feedback from businesses and consumers, “The Administration is announcing that it will provide an additional year before the ACA mandatory employer and insurer reporting requirements begin. 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.

“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,” he added.

Mazur further noted that the Obama administration continues to encourage employers to expand coverage options for employees during the 2014 transition period. Read the full post here.

Prior to the announcement, businesses with 50 or more employees were expected to offer health care coverage to employees as of January 1, 2014, or face a variety of penalties for non-compliance.

DWM magazine featured an in-depth article on ACA (see “Health Care Report” in the June 2013 issue of DWM magazine) and talked to company CEOs to gauge the effect this is having on their businesses. One of the company’s featured was Mike Gilkey, CEO of Gilkey Window Company, and he also weighed in regarding this recent news regarding the delay.

“I am happy that the fines have been delayed for a year for Gilkey Window,” he says. “The individual mandate is still in effect which will be a smaller fine, around $360 per person the first year I believe. We may give our employees a bonus in order to pay it. The Contraceptive Mandate is still in effect, which is the deal breaker for me.”

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