Delay Of PPACA Employer Mandate

On July 2, 2013, the Obama Administration announced a one-year delay in the enforcement of certain portions of the Patient Protection and Affordable Care Act (PPACA). Specifically, the Administration announced that enforcement of the mandatory employer and insurer reporting and the employer shared responsibility payments (“the employer mandate”) would be delayed by one year. Under the terms of PPACA’s employer mandate, covered employers with 50 or more full-time equivalent employees must offer affordable, qualifying health insurance to full-time employees and their dependents by 2014 or pay a penalty. With the delay, enforcement of this requirement would not take place until 2015. At this time, it is unclear exactly how the delay in enforcement will be implemented given that the actual provisions of the law call for an effective date of 2014. Other portions of the law, such as the individual mandate, are unaffected by this delay in enforcement.

According to the announcements, the decision comes after numerous complaints from businesses regarding the complexity of compliance with reporting requirements. Valerie Jarrett, senior advisor to President Obama, stated in The White House Blog, “we believe we need to give employers more time to comply with the new rules.” In a statement from Assistant Secretary for Tax Policy at the Department of Treasury, Mark J. Mazur wrote “we have heard concerns about the complexity of the requirements and the need for more time to implement them effectively.” According to the Treasury website, “formal guidance describing this transition” will be published “within the next week.” Mazur also noted proposed rules implementing the reporting requirements under PPACA are expected to be published this summer “after a dialogue with stakeholders.” 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.”

The attorneys at Wimberly Lawson Wright Daves & Jones will continue to monitor developments on this issue and provide more information as details and guidance are forthcoming.