In the on-going saga of implementation of the Affordable Care Act (ACA), the Obama administration announced Monday that it is again delaying the application of the law’s employer responsibility provision (commonly referred to as the “play or pay” provision) for some small employers until 2016. The delay was announced in the Department of the Treasury and IRS final regulations addressing the play or pay provision released earlier this week.
Under the play or pay provision, employers with 50 or more employees face penalties if they fail to offer health insurance coverage or if the coverage offered is insufficient under the ACA. The provision was originally scheduled to be effective on January 1, 2014, but last summer the administration delayed implementation until 2015. Monday’s announcement moves the deadline back to January 1, 2016 – but only for employers with under 99 or fewer employees.
Now, under the new final regulations, employers with 50 to 99 employees will not face any penalties until 2016. However, they will still have to report their workers and insurance coverage in 2015.
“Large employers”, those with 100 or more employees, will still have to contend with possible penalties under the play or pay provision in 2015, but the final regulations provide some limited relief for these employers. The regulations phase in the percentage of full-time employees who must be offered coverage for employers to avoid penalties (70 percent in 2015 and 95 percent in 2016 and thereafter).
The final regulations also provide clarification for a number of questions and issues that arose from the proposed play-or-pay rules issued in January 2013. Additionally, according to the Treasury’s press release, employers should be watching for more ACA regulations. Specifically, the release indicated the administration will be releasing regulations addressing employer-reporting requirements in the near future.
For ACA issues or other Employment Law issues, please do not hesitate to reach out to any of our BHMK attorneys.