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Pay or Play Postponed

July 10, 2013 | Leave a Comment


The Obama Administration announced Tuesday afternoon that it would delay the
penalty and reporting provisions of the ACA’s employer mandate (also known
as “Play or Pay”) until 2015. This was due in part to comments from
interested parties concerned with the complexity of the proposed regulations
amid looming implementation deadlines, and in part to the Administration’s
desire to encourage employers to continue offering health insurance to their
employees. Accordingly, both the employer and insurer reporting
requirements and any penalties under the Play or Pay mandate have been
delayed until 2015.

In the interim, the Administration intends to simplify two new requirements
under the ACA that will now be effective in 2015: Informational reporting
under Sections 6055 and 6056 of the Internal Revenue Code. Section 6055
reporting is required by insurers and self-insured plans. Section 6056
reporting generally applies to certain large employers with respect to the
health coverage offered to their full-time employees. Additional guidance
on these requirements is expected later this summer. Employers will be
encouraged to voluntarily implement these new requirements in 2014, in
preparation for 2015.

The delay does not affect the availability of premium credits for
individuals eligible for federal subsidies, nor any other provision of the

Peter Marathas, our compliance counsel, has the following observation:
“This development is not entirely a surprise. The federal government has
heard from many employers that they will just not be ready in time for 2014.
The government also recognizes that it won’t be ready to collect the large
amount of data involved, and that it needs to steam-line its thinking of how
that data will be collected. Employers rushing toward work-place solutions
for complying with the Play or Pay Mandates should take this time to take
stock and more thoughtfully consider their options. However, they should
not lose sight of the fact that this is only a delay-and just resets the
clock, which is still ticking.”

At this time, there is no information as to whether there will be any
additional transition relief (e.g., a delayed effective date in 2015) for
non-calendar year plans starting in 2014.

Posted in Benefits, Blog, Health Care Reform Info, Human Resources, Legislative Alerts

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