Are you trying to sift through countless articles about the employer mandate delay? Save yourself some time by reading this short Q & A with Steve Dunavant, Senior Managing Director of CBIZ MHM - Memphis. Steve weighs in on the large employer mandate delay and answers the questions employers and employees alike want answered.
1. What has been delayed and what has been excluded?
The employer shared responsibility penalty requiring companies with more than 50 full-time employees to provide health insurance to workers as well as an employer and plan reporting requirement have been delayed one year. For employer planning purposes, employers should know that all systems are "go," at least at the moment, for other requirements of the law. You can view our CBIZ Health Reform Bulletin for more detail.
2. Does the extension suggest that employers delay their own implementation efforts as it relates to the ACA's large employer provisions?
Employers were clearly struggling to digest the law and its guidance ahead of the former effective date. Similarly, the Government was experiencing its own difficulty in implementing the provisions as well and cited the information reporting requirements for large employers, insurers and self-insured health plans as the reason for the extension of the effective date. The additional time is clearly needed, and accordingly, employers should continue to evaluate and plan for implementation of the ACA provisions so that they are properly prepared in advance of the new effective dates.
3. Does this delay affect employees?
The delay of the employer mandate until 2015 does not change the effective date for the individual mandate. It is important to note that tax credits are available to individuals to assist with the purchase of health coverage. Those credits are only available to employed individuals who are either not offered health coverage by their employers or are offered coverage that is not affordable (i.e. costs more than 9.5 percent of employees income) or does not provide a minimum value (provides coverage for 60 percent of health care costs). Absent the employer reporting provisions, it is questionable how the Government will verify claims by employed individuals that coverage is not available, unaffordable or inadequate.
4. Does this delay affect employer planning?
Possibly, fewer employers may cut employee hours to below 30 hours/week (so as to classify them as part-time) because they will avoid being charged a penalty this year (see §4980H). Additionally small employers concerned about exceeding the 50 FTE threshold will have additional time to consider the impact triggering the ACA large employer provisions.
5. Will there be future delays for individuals?
Though there has been speculation about the Obama administration delaying further provisions of the Affordable Care Act, there has been no official correspondence about such delays. A recent GAO Report released this past June notes that "much remains to be accomplished in a relatively short period of time," and that significant implementation challenges remain.