The Obama administration has announced that the employer mandate under the Patient Protection and Affordable Care Act (PPACA) has been delayed from January 1, 2014 to 2015. The mandate requires mid-to-large-sized employers to offer health insurance coverage to eligible employees and is one of the primary pillars of the reform. The delay comes after many employers expressed concerns over the challenges presented by the mandate.
“We have heard concerns about the complexity of the requirements and the need for more time to implement them effectively,” said Mark J. Mazur, assistant secretary for tax policy at the U.S. Department of Treasury. “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 year-long delay will supposedly allow the department to consider simple ways for employers to report the requirements while remaining within the confines of the law. The Treasury Department will continue to issue guidance to insurers, self-insuring employers, and others who provide health coverage and a formal set of overhauled rules will be proposed later in the year. Several studies have found that many companies would downsize or cut hours in order to avoid the mandate.
Other provisions of the law, including the required establishment of healthcare exchanges, will remain unchanged. The delay will also provide employers extra time to update their coverage without the looming pressure of non-compliance penalties. Yet the question remains as to whether or not full implementation will happen on time, even with the one-year delay.