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CLIENT ALERT

July 9, 2013

Postponement of Key Affordable Care Act Provision

Large employers that fail to provide minimum health coverage for employees will not be subject to the shared-responsibility penalty until 2015 according to the Department of Treasury, which announced Tuesday it would delay certain provisions of 2010's Affordable Care Act (ACA).

In a Treasury blog post titled, "Continuing to Implement the ACA in a Careful, Thoughtful Manner," Assistant Secretary for Tax Policy Mark Mazur wrote that the government "will provide an additional year before the ACA mandatory employer and insurer reporting requirements begin."

Mazur wrote that Treasury expects to soon publish proposed regulations implementing the information-reporting requirements for insurers and employers that provide health coverage. The effective date for these provisions, he wrote, will be 2015, although the government will encourage voluntary compliance in 2014 (the original effective date was 2014).

Because the 2015 effective date for the proposed regulations will make it difficult to determine which employers are liable for the shared-responsibility penalty, enforcement of that penalty is also being postponed until 2015, Mazur wrote.

An employer is a "large employer" for a calendar year if, during the preceding calendar year, it employed on average at least 50 full-time employees. An employee is a full-time employee for any month if he or she was employed, on average, at least 30 hours per week.

Mazur wrote that the postponement will help the government achieve two goals: "First, it will allow us to consider ways to simplify the new reporting requirements consistent with the law. Second, it will provide time to adapt health coverage and reporting systems while employers are moving toward making health coverage affordable and accessible for their employees." Guidance that formalizes the changes announced in the blog post is expected, according to Mazur, within a week.

If you are currently considering your options with regard to the ACA, then you will need to factor in this postponement as well as the uncertainty of possible future changes to the implementation of this complex law. Should you have any questions about this new development, please contact Rob Swenson at 312.670.7444 or rswenson@orba.com

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