Bending to criticism that requirements were
burdensome and complex, the Obama
Administration announced late Tuesday it
would delay until 2015 a key provision in the
healthcare reform law - the requirement that
businesses with more than 50 employees
must offer them insurance.
Large employers will have an additional year
before the employer insurance reporting
requirements and penalties take effect under
the Affordable Care Act, a senior official at
the Department of Treasury said.
"We have heard concerns about the
complexity of the requirements and the need
for more time to implement them
effectively," Mark Mazur, assistant secretary
for tax policy at the Department of the
Treasury, explained in a blog , 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
[See also: More docs questioning benefits
of ACA, EHRs .]
As required by the Affordable Care Act,
beginning Jan. 1, employers faced a $2,000
penalty for each full-time employee who did
not get health coverage. Some critics of the
ACA had predicted that employers would cut
hours or employees to avoid the requirement.
"This one-year delay will provide employers
and businesses more time to update their
health care coverage without threat of
arbitrary punishment," said Neil Trautwein,
vice president and employee benefits policy
counsel of the National Retail Federation, in
a statement responding to the
While many organizations, like the U.S.
Chamber of Commerce, praised the decision
to delay enforcement of the mandate, the
American Hospital Association criticized the
delay as an erosion of the ACA's coverage
The administration's decision "is troubling for
those individuals who will not gain coverage
through their employer," said Rich
Umbdenstock, AHA president and CEO, in a
statement. "The goal of the ACA was to
extend coverage to the uninsured, which
required a shared responsibility from all
[See also: Insurance exchanges running
The delay will provide the time for the
federal government to consider ways to
simplify the new reporting requirements and
to adapt health coverage and reporting
systems while employers are moving toward
making health coverage affordable and
accessible for their employees.
Mazur said the administration will publish
formal guidance describing this transition
within the next week.
The administration is also working on rules
detailing how the ACA's information
reporting provisions will be implemented.
Mazur said in his blog that those proposed
rules should be released this summer. Once
those rules are issued, Mazur said, the
administration will work with the affected
employers, insurers and others in an effort to
get voluntary reporting in 2014 rather than
waiting until 2015.
"Real-world testing of reporting systems in
2014 will contribute to a smoother transition
to full implementation in 2015," he said.
The delay to 2015 is also being extended to
shared-responsibility payments because it
would be difficult to determine which
employers were owed those payments, Mazur
said. These actions also do not affect
employees' access to the premium tax credits
available under the ACA.