Obama administration delays PPACA Employer Mandate – again

Obama administration delays PPACA Employer Mandate – again

Treasury_DC210Under regulations issued today (Monday, February 10, 2014) only employers with more than 100 full-time workers will be subject to fines in 2015 (unless they offer coverage).

The “Employer Mandate”, originally due to take effect for January 1, 2014, but was delayed under prior guidance. The requirement that large employers provide their workers with health benefits in 2015 will be phased in in 2015 and 2016.

This latest delay (“phase-in”) is being advertised by the administration as an “aid to business” that will help/permit businesses with some much-needed time to adapt to the new requirements. (Considering PPACA was signed into law in March of 2010, one has to wonder how much more time is necessary and if it truly is “business” that needs the time or the administration that needs more time to develop mechanisms to receive and capture data necessary to determine if employers are complying).

Employer Mandate “Phase In” by Employer Size

Employers with 50 to 99 full-time employees will not face penalties for not offering coverage to full-time employees and their dependents up to age 26 until the first plan year beginning on or after January 1, 2016. These employers will need to certify that they are not reducing the size of their workforce to stay below 100 employees.

Employers with 100 or more full-time employees and their dependents up to age 26 will not face penalties if they offer coverage to 70% of their full-time employees in 2015. They will need to offer coverage to 95% of full-time employees beginning in 2016.

The full-time employee definition remains at 30 hours or more per week. The definition of dependent has been revised to exclude stepchildren and foster children. It continues to exclude spouses.

Assistant Treasury Secretary for Tax Policy Mark J. Mazur offered this:  “While about 96% of employers are not subject to the employer responsibility provision, for those employers that are, we will continue to make the compliance process simpler and easier to navigate.  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 to help offset the cost to taxpayers of coverage or subsidies to their employees.”  See the Treasury Department’s fact sheet here (html) and in PDF form here.

During 2015, the new regulations allow employers to offer coverage to only 70% of their workers, and they will have to provide coverage to 95% of full-time workers in 2016.  [You may recall that the requirement that companies with more than 50 full-time workers provide insurance or pay a fine is designed to prevent employers from dropping health benefits once the government offers subsidies to help individuals buy coverage (the so-called exchanges, now called Marketplaces)].

The fines, for non-complying employers, will remain at $2,000 per employee, with the first 30 employees not counting towards the fine.

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