Obama Administration Set to Postpone ACA Employer Reporting, Penalties for 2014

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By Florence Olsen
Brian Broderick contributed to this report.


The Obama administration July 2 informally announced that it will delay for one year new mandatory reporting requirements for employers and health insurers--as well as related employer shared-responsibility penalties--under the Affordable Care Act.

Mark J. Mazur, assistant secretary for tax policy at the Treasury Department, in a Treasury Notes blog posting said the department will publish formal guidance within the next week describing details of the transition relief for the reporting requirements.

Mazur said the delay in reporting requirements under tax code sections 6055 and 6056 would create time for the administration to propose simplified reporting requirements sometime this summer.

IRS notices 2012-32 and 2012-33 requested comments in 2012 on the reporting requirements under sections 6055 and 6056 (30 HRR 487, 5/7/12). The reporting was to apply to health insurance coverage provided on or after Jan. 1, 2014. The first information returns were to have been filed in 2015.

Mazur said the administration will encourage employers and health insurers to implement the reporting requirements voluntarily in 2014 to prepare for mandatory reporting in 2015. “Real-world testing of reporting systems in 2014 will contribute to a smoother transition to full implementation in 2015,” he said.

In addition, Valerie Jarrett, senior adviser and assistant to the president for intergovernmental affairs and public engagement, said in a White House blog posting that “[w]e will convene employers, insurers, and experts to propose a smarter system and, in the interim, suspend reporting for 2014.”

The delayed reporting will have a direct impact on determining which employers owe shared-responsibility payments under tax code Section 4980H for 2014. “Accordingly, we are extending this transition relief to the employer shared responsibility payments,” Mazur said in the Treasury blog posting.

Chamber Welcomes More Time

U.S. Chamber of Commerce President and CEO Thomas J. Donohue July 3 reiterated its view that “the employer mandate and other burdensome provisions of Obamacare would be harmful to job creation and economic growth.”

“The Administration's decision to recognize this fact yesterday and delay the implementation of the employer mandate is welcomed by the business community and will help avoid some serious near-term economic consequences of this law,” Donohue said. “As we move forward, the Chamber will continue to work with the Administration and lawmakers to mitigate potential problems associated with Obamacare implementation.”

The American Benefits Council issued a statement July 2 from its President James A. Klein who said the delay of employers' reporting requirements and penalty payments for 2015 “provides vital breathing room to implement the law in a more thoughtful and administrable way.”

AFL-CIO Calls Delay 'Troubling.'

The AFL-CIO did not welcome the delay. “The employer responsibility provision included in the ACA, while not as strong as we asked for, was designed to give large employers an incentive to offer or continue offering affordable, comprehensive health care coverage to some of their employees. The Administration's announcement that it is delaying employer responsibility assessments until 2015 is troubling because it removes that incentive for next year,” the labor federation said July 3.

“In light of this decision, we believe it is even more urgent for Congress and the Administration to reaffirm their commitment to employer responsibility,” AFL-CIO said. “We appreciate the need for flexibility and common sense implementation of a new law, particularly one of this scope. There are a number of areas in which we have asked that the ACA be interpreted to strengthen the delivery of benefits through employment-based plans. We hope the Administration will address these concerns just as they have the concerns voiced by employers.”

Limited Impact

Law professor Timothy Jost of Washington and Lee University told BNA July 2 that, because most employers subject to the mandate already provide health insurance, “the impact of the delay should not affect that many people. It is possible, however, that some employers will be more likely to dump their employees into” the insurance marketplaces that were created under the ACA and are set to start providing coverage in 2014 “or offer inadequate or unaffordable coverage now that there is no consequence for doing so.”

Jost added, “It is to be hoped, on the other hand, that some employers that have reduced employees to part-time work to avoid the cost of the mandate will now restore them to full employment while the details get worked out.” He also expressed the hope that the administration “continues to abide by its promise to implement the rest of the law in a timely fashion.”

Under Section 4980H, large employers may face penalties if they do not offer their full-time employees and their dependents affordable, minimum value health care coverage and at least one of the employees receives a premium tax credit or reduced-cost health insurance through a state exchange or federally administered exchange (31 HRR 8, 1/14/13).


The Treasury Department blog posting is available at http://www.treasury.gov/connect/blog/Pages/Continuing-to-Implement-the-ACA-in-a-Careful-Thoughtful-Manner-.aspx. The White House blog posting is available at http://www.whitehouse.gov/blog/2013/07/02/we-re-listening-businesses-about-health-care-law.

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