Late Tuesday the Treasury Department provided the business community welcome relief by announcing that employers would not be penalized in 2014 under the insurance coverage mandate. Enforcement of the significant penalties that businesses with over 50 full-time employees could be assessed for not providing health insurance coverage to at least 95 percent of full-time workers will instead begin in 2015. Those penalties would currently amount to $2000/year for every full-time employee, not counting the first 30 employees.
The Affordable Care Act (better known as “Obamacare”) has drawn plenty of criticism from business leaders, who have raised concerns about implementing the seemingly-unending array of complex requirements under the Act and its voluminous regulations. The one-year delay sprang from those implementation challenges.
Indeed, the employer mandate has already resulted in many employers laying off workers or cutting employee hours to avoid the requirement and potential fines. This enforcement delay is meant to ease such unintended consequences (or at least push them back a year), but will no doubt be seen by Obamacare supporters as a setback for the White House and its signature bill.© 2014 BARNES & THORNBURG LLP