New Delays Announced For Affordable Care Act
Impact Medium & Large Businesses

URGENT NEWS: Portions of Large Employer “Pay or Play” Mandate Have Been Postponed & Further Defined

Late Monday the Department of Treasury announced a number of final regulations related to the Affordable Care Act’s so called shared responsibility. Attached please find our Health Care Reform Bulletin entitled Final Employer Shared Responsibility Regulations Issued.

The Treasury addressed a number of important items which can be summarized as follows and that are addressed in the attached Bulletin;

  • Compliance for so-called medium-sized employers (50 to 99 employees) is now delayed until 2016.
  • Certain 2014 transition relief is extended including relief for non-calendar year plans.
  • For ‘large’ groups over 100 employees the requirement to offer coverage for full-time employees will be phased in over two years, starting with 2015 when 70% of those eligible should be covered before requiring 95% of those eligible to be covered in 2016 to avoid fines.
  • Full-time status is clarified for certain groups.

The new Regulations state that employers with between 50 and 99 employees will not have to comply with the Affordable Care Act’s mandates until 2016, delaying implementation for businesses of that size by a year, the second implementation delay since the law was created. The Treasurer estimates that employers of this size, 50 to 99 employers, represent about 7% of America’s workforce.

The Treasury also announced that larger employers with 100 or more employees would be required to offer coverage to at least 70% of all eligible employees in 2015 (formerly the requirement was 100%) and that that figure will rise in 2016 to 95%. The Treasury estimates that businesses with 100 or more workers make up about 66% of America’s work force and that most firms of this size already offer health insurance benefits to their employees.

Smaller businesses, those with less than 50 employees, are not subject to the laws mandate. The Treasury estimates that businesses of these size account for 28% of private sector employees and 96% of all private employers.

“The bottom line is that Obamacare is not going away. The administration is providing another one-year delay, until 2016, for some employers. But they have to take the law seriously and figure out ways to comply. The administration did not provide the relief sought by employers in some high-turnover industries like restaurants and retail.” Paul M. Hamburger, a lawyer who advises employers at the Proskauer labor law firm.

The delays, as with the initial delay of the mandate from January 1, 2014 to 2015, are being seen as a political move designed to postpone key impacts, and possible increased costs, to employers until after the mid-term elections in the Fall of 2014. For its part the Whitehouse has called the new approach a form of ‘transition relief’ to help employers adjust to the requirements of the new law.

In making the announcement the Treasury had this to say;

“Today’s final regulations phase in the standards to ensure that larger employers either offer quality affordable coverage or make an employer responsibility payment starting in 2015,” said Mark J. Mazur, the assistant Treasury secretary for tax policy. “The purpose of the penalty, he said, is to help offset the cost to taxpayers of providing coverage or subsidies to people who cannot get affordable health insurance at work”.

The Treasury’s regulations are detailed and address a number of on-going questions so as to clarify the law. The attached outline is a good starting point to digest the new Regulations. As we digest all of the various provisions we will provide additional guidance to you as well as post it on our Healthcare Reform web site that can be found here.

Please contact your Morris & Reynolds Agent or Account Manager with any questions you have on this news or any other item as we are happy to help. As always, thank you for allowing us to assist you and your employees.

Trusted Insurance

"Savings & Service Has Been Our Policy Since 1950"
14821 South Dixie Highway, Miami, Florida 33176
P 305.238.1000 | F 305.255.9643
E info@morrisandreynolds.com

Independent agent