The Obama Administration has postponed enforcement the Affordable Care Act’s (ACA) employer health insurance mandate for medium-sized employers (those with 50-99 employees) until 2016, according to a February 10th announcement from the U.S. Treasury Department.
However, businesses with 100+ employees are still required to begin offering employer-based health insurance coverage in 2015.
Prior to this announcement, all medium-sized businesses (50-99 employees) were required to provide coverage to workers beginning in 2015, or face financial penalties. The delay is the second postponement for medium-sized businesses, following a July 2nd, 2013 announcement that pushed the original January 2014 deadline to January 2015.
The delay will provide another year for these businesses to adapt to the changing health care marketplace. The announcement was part of the Treasury Department’s final regulations implementing the employer responsibility provisions under the ACA.
“While about 96 percent of employers are not subject to the employer responsibility provision, for those employers that are, we will continue to make the compliance process simpler and easier to navigate,” said Assistant Secretary for Tax Policy Mark J. Mazur.
“Today’s final regulations phase in the standards to ensure that larger employers either offer quality, affordable coverage or make an employer responsibility payment starting in 2015 to help offset the cost to taxpayers of coverage or subsidies to their employees.”
How the policy affects employers:
- Small Businesses with fewer than 50 employees: (about 96% of all employers): Under the Affordable Care Act, companies that have fewer than 50 employees are not required to provide coverage or fill out any forms in 2015, or in any year, under the Affordable Care Act.
- Larger employers with 100 or more employees (about 2% of employers): The overwhelming majority of these companies with 100 or more employees already offer quality coverage. Today’s rules phase in the percentage of full-time workers that employers need to offer coverage to from 70 percent in 2015 to 95 percent in 2016 and beyond. Employers in this category that do not meet these standards will make an employer responsibility payment for 2015.
- Employers with 50 to 99 employees (about 2% of employers): Companies with 50-99 employees that do not yet provide quality, affordable health insurance to their full-time workers will report on their workers and coverage in 2015, but have until 2016 before any employer responsibility payments could apply.