Administration Delays ACA Pay or Play Rules until 2015

The Obama Administration (Administration) has announced that it will provide an additional year before the Affordable Care Act (ACA) mandatory employer and insurer reporting requirements begin. What this means is that the Pay or Play provisions and penalties for businesses with 50 or more full time employees are delayed until 2015. Businesses with less than 50 full time equivalent employees were already exempt from this provision. Over the past several months, the Administration has been engaging in a dialogue with businesses, many of which already provide health coverage for their workers, about the new employer and insurer reporting requirements under the ACA. The delay is in response to employers concerns about the complexity of the requirements and the need for more time for employers to implement them effectively. Quoted by the Administration, “We recognize that the vast majority of businesses that will need to do this reporting already provide health insurance to their workers, and we want to make sure it is easy for others to do so. We have listened to your feedback. And we are taking action.”

The delay in implementing the Pay or Play provisions will allow the Administration 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. Within the next week, we expect the Administration to publish formal guidance describing this transition. Once this formal guidance has 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.

As of now, other provisions of the law are still effective in 2014, such as the individual mandate.

As we learn more when formal guidance and rules are released from the Administration, your Craford team will reach out to you with necessary updates.