For anyone in the employee benefits world, the news yesterday regarding the delay of a key part of the Affordable Care Act (ACA) is huge. Released in a rather quiet manner via a Treasury department blog, the delay of the ACA's Employee Shared Responsibility component (a.k.a. "Pay or Play") actually came secondarily as a result of a need to provide a transitional year for reporting obligations under the law.
Mark Mazur's Treasury Notes blog reads: "The Administration is announcing that it will provide an additional year before the ACA mandatory employer and insurer reporting requirements begin. This is designed to meet two goals. First, it will allow us to consider ways to simplify the new reporting requirements consistent with the law. Second, it will provide time to adapt health coverage and reporting systems while employers are moving toward making health coverage affordable and accessible for their employees."Mazur goes on to say "We recognize that this transition relief will make it impractical to determine which employers owe shared responsibility payments (under section 4980H) for 2014. Accordingly, we are extending this transition relief to the employer shared responsibility payments. These payments will not apply for 2014. Any employer shared responsibility payments will not apply until 2015."
So what exactly does this mean? One could speculate endlessly about the political ramifications and strategies at play. And if you are a news junkie you can find your preferred flavor or angle on any number of various television channels or websites.
From an employer and plan sponsor perspective, the Treasury announcement states "Within the next week, we will publish formal guidance describing this transition... During this 2014 transition period, we strongly encourage employers to maintain or expand health coverage. Also, our actions today do not affect employees' access to the premium tax credits available under the ACA (nor any other provision of the ACA.)
So what is changing? If you are a large employer in 2014 penalties will not be assessed if you have employees that obtain subsidies through the exchange because you do not offer coverage or your coverage is either unaffordable or does not meet minimum value.
What is not changing:
- The launch of the State Exchanges (Marketplaces)
- Subsidy programs within the Marketplace
- The individual mandate
- Any other ACA provision
In the meantime, "large employers" and those of us working on strategies around understanding how the 30 hours per week definition will impact eligibility, cost, "affordability" and "minimum value" now have a reprieve and an additional year to plan.
For information on how to determine if you are a large employer, read OneDigital Practice Leader Bob Marino's post on OneDigitalNation: Before You Pay or Play, You Need to Determine if You Are A Large Employer.
If you have questions about Pay or Play, Health Care Reform, or any other benefit plan matter, please contact an OneDigital consultant or account manager.