The Obama administration will not penalize employers that do not offer health benefits until 2015. The U.S. Department of Treasury announced the delay in enforcing the provision of the Patient Protection and Affordable Care Act (“ACA”) on July 2, 2013,1 citing employer concerns over implementing the requirement by the original deadline of January 1, 2014. The ACA requires employers with more than 50 full-time employees to offer health insurance to employees or pay a penalty.2 However, under IRS Notice 2013-45, the administration will not penalize employers until 2015, giving businesses an extra year to comply with the law. The notice on the delay can be found here.

What is Delayed?

The delay in Notice 2013-45 applies to the following:

    • Information reporting under section 6055 of the Internal Revenue Code, which includes annual information reporting by health insurance issuers, self-insuring employers, government agencies, and other providers of health coverage.
    • Information reporting under section 6056 of the Internal Revenue Code, which includes annual information reporting by employers regarding what it offers – or does not offer – to its full-time employees.
    • The employer shared responsibility penalty under section 4980H.

The notice encourages employers to voluntarily comply with the reporting in 2014 to prepare for 2015, but confirms such reporting is optional for 2014.

What is Not Affected?

The IRS guidance specifically indicates that all other aspects of the ACA are not affected. In part, this means that for 2014:

    • The exchanges will open.
    • The individual mandate applies.
    • Other employer group health plan mandates still apply, such as:
        • No preexisting conditions
        • No waiting periods longer than 90 days
        • No annual limits on essential health benefits
        • Wellness program changes
    • The patient centered outcomes research (PCOR) fee applies.
    • The transition reinsurance fee applies.

Please contact any of the attorneys in the Dorsey & Whitney Benefits and Compensation department if you have questions.

1   Mark J. Mazur, Continuing to Implement the ACA in a Careful, Thoughtful Manner, U.S. Dep’t of the Treasury (July 2, 2013).
2   26 U.S.C. § 4980H (2012).