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Affordable Care Act – Delay of Pay-or-Play Penalties Announced

Late on Tuesday, July 2, 2013, the Treasury Department announced that the health care reform “pay-or-play” penalties for employers that were set to take effect in 2014 will be delayed until 2015. The Administration also announced the delay of certain employer and insurance carrier reporting requirements. The Treasury Department made the announcement through a press release, which indicates that formal guidance will be issued “within the next week” and further stated “we strongly encourage employers to maintain or expand health coverage.” The announcement states that other provisions of the Affordable Care Act (ACA) are not affected, meaning that the announcement does not affect the “individual mandate” or change the requirement that all employers who offer coverage must do so in a manner that complies with other provisions of the ACA.

To expand coverage to many without it, the ACA imposes “shared responsibility payments” on employers of more than 50 employees who do not offer coverage (“pay-or-play”) and also on most individuals who do not have coverage (“individual mandate”). The Treasury Department’s announcement delaying enforcement of the pay-or-play rules until 2015 has already caused many to urge that enforcement of the individual mandate also be delayed, particularly in light of uncertainty as to how the state and federal insurance exchanges will open in the fall and operate in 2014. More information regarding the exchanges is anticipated over the next few months.

The delayed implementation of these ACA reporting requirements, and the associated pay-or-play penalties, provides employers with additional time to assess their current health coverage offerings and evaluate their systems for meeting the reporting requirements.



About this Author

Charles Stevens, Michael Best Law Firm, Labor and Employment Attorney

A persuasive advocate, Charlie vigorously defends employers and benefit plans in courts and other forums. He excels at assessing and fixing problems that arise with employee benefit programs and providing a strategically driven approach to benefits compliance and risk management planning.

As exclusive employee benefits counsel to many nationwide employers, Charlie’s practice focus extends to:

  • Counseling on Affordable Care Act (ACA) compliance and strategic planning, particularly with respect to contingent...

Mark Lotito, Michael Best Friedrich, labor employment attorney, internal revenue code  lawyer, ERISA legal counsel, Affordable Care Act compliance law

Mark Lotito is an attorney in the Labor and Employment Practice Group with an emphasis on employee benefits law.  His experience includes dealing with plan compliance under the Internal Revenue Code and ERISA, familiarity with drafting qualified and non-qualified plans, preparing participant communications, such as summary plan descriptions, correction of plan failures in accordance with IRS EPCRS procedures, addressing multiemployer plan and withdrawal liability issues, analyzing worker classification and plan eligibility, and preparing for Affordable Care Act compliance.

Dr. Lotito also has experience in federal and state court trade secret and non-competition litigation.