Affordable Care Act News- Employer Mandate Delayed
By: Rudman Winchell Attorney Brent A. Singer
Starting in 2014, applicable large employers were to be assessed certain “shared responsibility” penalty taxes under IRC § 4980H, of the Affordable Care Act (“ACA”), if they did not offer certain types of health insurance coverage to their full-time employees. To eliminate any chance for such assessments, employers would have been required, starting in 2014, to offer “affordable” (as defined in the regulations) coverage to full-time employees.
On July 2, 2013, however, in a brief “Treasury Note” titled “Continuing to Implement the ACA in a Thoughtful Manner, the Assistant Secretary for Tax Policy at the U.S. Treasury Department announced that “employer shared responsibility payments [under § 4980H] will not apply until 2015.” He indicated that within a week IRS will publish more formal guidance on this matter (which, as yet, does not seem to have happened), but that generally, the Administration is providing “an additional year before the ACA mandatory employer and insurer reporting requirements begin,” and therefore, no shared-responsibility payments under § 4980H will be assessed for any circumstances occurring in 2014.
This is very big news, and perhaps the timing of the announcement was meant to coincide with the start of a holiday week in which it would not capture as much attention.
In any event, readers should recall that the ACA does not obligate employers to offer any insurance at all. An applicable large employer, now starting even in 2015, can offer no coverage at all, and still not be violating any law under the ACA. Instead, however, starting in 2015, if the employer decides not offer certain types of coverage, the employer may be liable for “shared responsibility” taxes under § 4980H, when otherwise it would not.
These materials have been prepared by Rudman Winchell for educational purposes only. They should not be considered legal advice. The transmission of this information to you is not intended to create a lawyer-client relationship. Readers should not act upon this information without seeking professional counsel. You should not send any confidential or private information to Rudman Winchell until a formal attorney-client relationship has been established, in writing.