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Administration Announces Delay in Affordable Care Act Requirement – Employers Breathe Sigh of Relief

Posted in Employment Law

On July 2, 2013, the Obama Administration announced that employers will have an additional year to comply with the Affordable Care Act (ACA) requirement to provide health insurance for full-time* employees or pay a tax penalty.

Originally, the ACA mandated that employers with more than 50 employees provide health insurance and report to the federal government details regarding employee access to and enrollment in those insurance plans starting in 2014. The announcement pushed this deadline to 2015. The Administration essentially acknowledged that the law’s complicated reporting requirements would strain businesses and the additional year will allow the Administration to “re-vamp and simplify” the reporting process. Because the tax penalties are assessed based upon the information reported by employers, no penalties will be assessed in 2014. The Administration couched the decision as the result of feedback from businesses needing more time to comply with the law.

We expect the Administration to publish additional guidelines in the coming weeks and months. In the meantime, employers can breathe a sigh of relief and assess their options with renewed hope that compliance with the ACA will be simplified.

*Under the ACA, a full-time employee is one who works an average of thirty (30) hours per week.

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