ACA's Employer Mandate Again Delayed
for Certain Groups
On February 10, 2014, the Obama Administration announced a second delay to the Affordable Care Act's (ACA) employer mandate, the policy that, as originally crafted, requires large employers to offer all their full-time workers health coverage that meets the new federal standards, or risk paying a penalty.
Mid-sized businesses (defined for the purposes of this communication as those with 50 to 99 employees) now have until 2016 to comply with the employer mandate. Large businesses (defined for the purposes of this communication as those with 100 or more employees) may now phase in the mandate gradually. To avoid a penalty, large businesses must offer coverage to 70 percent of their full-time employees in 2015 and 95 percent in 2016 and later years.
In New York the delay that applies to mid-sized businesses isn't likely to have a major impact on the demand for insurance, since mid-sized employers make up only a small percentage of the entire New York group market (about 2 percent, or around 800,000 people, according to the US Department of Labor) and provide coverage at a high rate (over 80 percent provide their employees some form of health insurance).
The phase-in for larger employers may, however, have a bigger impact since the leniency may further complicate requirements and confuse groups.
The employer mandate was originally set to take effect January 1, 2014. Last July the mandate was delayed until January 1, 2015, due to concerns from businesses and insurers about the difficulties of implementing it.
More information is available in the IRS's newly released FAQs.
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