Employers are collectively breathing a sigh of relief after the latest news from Washington on the employer insurance coverage mandate.
Yesterday, the Obama administration announced there will be a delay with implementing part of the Affordable Care Act (ACA) which required employers with over 50 employees to offer adequate health insurance coverage (and prove it) or else pay penalties. A big reason for the delay is that employer reporting requirements have not been clearly defined by the government. Employers are required to provide this information to various parties, namely the IRS and insurance exchanges, to determine the scope of any penalties involved with not providing sufficient coverage to employees.
Prior to the announcement, companies across the U.S. had been worried about not having enough time or knowledge to assess the impact of the new federal requirements and take corrective actions to mitigate potential fines. This growing uncertainty spurred the White House to take action and delay this key provision. Without a clear framework of reporting & penalties, this mandate presented the threat of employment reduction for employers with over 50 employees, which in turn would have a negative impact on the economy by possibly increasing unemployment in the coming year.
Independent of the delay to employer reporting requirements, the individual mandate is still set to go into effect January 1, 2014.