On July 2, 2013, the Department of the Treasury (DOT) announced that there will be a delay in implementing the employer mandate and reporting requirements for insurers under the Affordable Care Act (ACA) until 2015 to allow time for the government to complete its operational preparedness and give employers time to adjust benefits accordingly. Also, the Internal Revenue Service (IRS) issued technical guidance on reporting requirements for employers regarding the one-year delay of the ACA employer mandate to provide affordable health insurance coverage. Since the announcement, significant media attention has focused on the impact of the delay on employers and related questions about other aspects of the ACA.
House Energy and Commerce Chairman Fred Upton and Assistant Secretary for Tax Policy Mark Mazur wrote, “The notice [allowing the delay] is an exercise of the Treasury Department’s longstanding administrative authority to grant transition relief when implementing new legislation like the ACA. Administrative authority is granted by section 7805(a) of the Internal Revenue Code.”
Most employers have expressed support for the delay, citing relief that it gives them another year to prepare for the coverage and reporting requirements of the mandate, and to structure their benefits. And in certain industries where the employer penalties are more problematic—industries dominated by smaller employers that do not provide coverage—efforts are also being made to modify the law raising the lower thresholds to companies with more than 100 employees and changing the definition of “full-time” to 40 hours weekly.
The ACA’s mandate requires that individuals be enrolled in “minimum essential coverage,” or obtain an exemption, or pay a tax penalty for not obtaining health insurance starting January 2014. Starting in 2015, Section 6055 of the Act requires insurers and employers that sponsor self-insured plans to report to the IRS information identifying each person provided minimum essential coverage during the preceding year. Per the ACA, individuals must self-attest on their tax return whether or not they have insurance, which will be later verified by the Section 6055 requirement for employers and insurers. The DOT said it will release formal guidance on the reporting requirements for both insurers and employers later this summer.