Obama Administration Announces Delay to Part of Affordable Care Act

July 4, 2013

On Tuesday, July 2, the Obama administration announced that it is delaying the requirement that businesses with more than 50 employees provide health insurance to their workers or pay a penalty. The delay extends to 2015. The announcement by the IRS comes after numerous complaints from businesses that the requirements were too complicated and difficult to implement in time.

Still on schedule are other key parts of the law, including the health exchanges where individuals can buy insurance. The exchanges will open on October 1, according to Valerie Jarrett, a senior adviser to President Obama. The delay also does not change the individual mandate, which requires most Americans to purchase insurance. Some consumers may receive subsidies to help them pay for the insurance depending on their incomes.

Jarrett stated, "As we make these changes, we believe we need to give employers more time to comply with the new rules. Since employer responsibility payments can only be assessed based on this new reporting, payments won't be collected for 2014."

The delay gives the IRS more time to simplify reporting requirements, as well as for businesses to get up to speed with reporting systems. The government still encourages businesses to voluntarily begin reporting in 2014 so they will be ready for 2015.

"We commend the administration's wise move to delay the employer reporting and penalty obligations under the Affordable Care Act," said National Retail Federation President Neil Trautwein. "This one-year delay will provide employers and businesses more time to update their health care coverage without threat of arbitrary punishment."

This does not affect businesses with fewer than 50 workers, who were already exempt from that rule. Most large businesses already offer coverage to their employees.

Various parts of the law have taken effect since its passage in 2010, including allowing children up to age 26 to remain on their parents' insurance plans and discounts for prescription drugs for Medicare patients. More young Americans have health insurance than before the law, because of that change, and the discounts have saved Medicare recipients billions of dollars.

Source: USA Today

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