In a move that was both a surprise and a relief to employers, the U.S. Department of the Treasury postponed both the Employer Shared Responsibility mandate (section 498OH) of the Patient Protection and Affordable Care Act (PPACA) and the accompanying reporting requirements until 2015. The Employer Shared Responsibility mandate states that employers with 50 or more full-time employees are required to offer health coverage that, at a minimum, meets the requirements of the law or be subject to possible penalties. This postponement has delayed enforcement of these penalties through 2014.
It is important to understand what has changed and what hasn’t changed in regards to the provisions and requirements of the PPACA. In addition to a delay in the enforcement of penalties, IRS reporting requirements under sections 6055 and 6056 will not be required in 2014, although the IRS is still requesting voluntary compliance. Components of the law that haven’t changed include the individual mandate, access to public “Marketplaces” beginning October 1st, subsidies or tax credits for individuals and the other assorted mandates and provisions included in the law.
If employers choose to not offer plans previously required in 2014 by the Employer Shared Responsibility mandate, employees will have to have a modified household income at or below 400% of the Federal Poverty Level in order to qualify for potential subsidies. This may lead to many employees purchasing public Marketplace coverage with these subsidies. According to The IMA Financial Group, “The implications of this may lead to a large number of employers purchasing public Marketplace coverage with subsidies. If then in 2015, the employer implements an affordable and minimum plan to avoid the exposure to “Play or Pay” penalties, the employee will no longer qualify for the subsidized coverage in the public marketplace, creating the need for additional communication strategies…”