Inside This Issue - News
Key provision delayed in health care reform
July 22nd, 2013
WASHINGTON – In a move that won quick approval from employer groups, the Obama administration has postponed the Affordable Care Act’s (ACA’s) mandate that larger employers provide health coverage for workers or pay penalties.
The decision moves back the mandate by one year, until January 1, 2015.
The ACA requires employers with more than 50 full-time workers to offer affordable health insurance or pay fines of at least $2,000 per employee. The requirement had drawn criticism from business, especially industries with lower wage structures such as retail, with some companies complaining that the complexity of the requirements demanded more time for implementation.
In late June the National Retail Federation (NRF) told a congressional panel that the industry needed an extension. "Our nation — particularly employers — cannot afford for the ACA to stumble out of the starting gate," said Neil Trautwein, vice president and employee benefits policy counsel at the NRF. "We fear that as time diminishes between now and January 2014, a cascade of additional last-minute regulations will create added confusion and thus could encourage more employers to back out of coverage."
The trade group, which has consistently opposed ACA, called for a delay of up to one year in implementing the legislation, and also urged Congress to redefine full-time coverage eligibility at 40 hours per week. The announcement of the delay, not surprisingly, won the NRF’s approval.
"We commend the administration’s wise move to delay the employer reporting and penalty obligations under the Affordable Care Act," said Trautwein in a statement. "This one-year delay will provide employers and businesses more time to update their health care coverage without threat of arbitrary punishment."
Individuals are still responsible to obtain health care coverage or pay a fine, effective January 1.