19 Jul 2014 Date No Longer Applies

Originally posted by United Benefit Advisors

For many months now, employers have been pointing towards 2014, when the employer shared responsibility (play or pay) part of the Patient Protection and Affordable Care Act (PPACA) would take effect. New Year’s Day 2014 was to be the day when, after three-plus years of preparation, the play-or-pay requirements would take effect for calendar year plans.

Jan. 1, 2014 is still a benchmark date for PPACA, as the exchanges are still scheduled to begin operating on that day, but now the timeline for many employer requirements has changed significantly, and with that modification come many question marks.

On July 9, 2013 the Internal Revenue Service issued Notice 2013-45, which confirmed that the employer shared responsibility penalties and reporting requirements will not apply until 2015 – one year later than originally outlined in PPACA legislation. The notice states that employers and insurers will not be required to provide reporting of coverage offered to, and elected by, employees for 2014. It also states that the employer shared responsibility penalties are also delayed to 2015. Among other details, the notice makes clear that the delay in the employer shared responsibility will not affect the employee’s ability to receive a premium tax credit/subsidy, and that the delay in the employer shared responsibility requirements will not affect the requirement that an individual obtain minimum essential coverage or pay a penalty.

“We have heard concerns about the complexity of the requirements and the need for more time to implement them effectively,” Mark J. Mazur, assistant secretary for tax policy, wrote in a U.S. Treasury Department blog post on the matter. “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 one-year delay, he wrote, “will allow us to consider ways to simplify the new reporting requirements consistent with the law.”

Unfortunately the notice – and the blog post – provided few additional details about how this extension will work. What this adds up to is much uncertainty surrounding an already uncertain time, and many concerned and some unhappy people.

House Energy and Commerce Committee Chairman Fred Upton (R-MI) stated that “the Administration’s sudden turnabout is a clear admission that its signature law is bad for business and bad for jobs. This law will never be ready for prime time and sadly, the administration’s acknowledgement that it still needs yet another year clearly disrupts everyone’s ability to determine what is best for them and their business.”

Partisan politics aside, Council of Insurance Agents and Brokers’ Joel Wood echoed a prevailing sentiment when he said “Our members have mixed emotions about this. They’ve invested an astonishing amount of resources in running the pay-or-play scenarios for their clients and preparing for January.”

Despite the chasm between viewpoints, the fact remains that all other facets of PPACA not affected by the delay, including insurance market reforms, will still come online in 2014. And, the Obama administration expects to issue the as-yet undetermined reporting regulations later this summer.