Provision of New Health Care Law Postponed One Year

Employers will no longer be required to provide health care coverage to employees starting January 1, 2014, as part of the Affordable Care Act (ACA) and Mark Liston, president of Glass Doctor, says this is good news for the industry.

According to reports from the Chicago Tribune, one of the key provisions of ACA has been delayed by the Obama administration, pushing back the effective date for employee coverage to 2015.

“This is great news for all small businesses-regardless if they have 50 employees or not,” Liston says. “What we have seen in the franchising sector is that companies are ‘afraid to grow.’ There is so much uncertainty with the Affordable Care Act and the ramifications for small businesses, franchised or not, that companies are hesitant to hire and hesitant to grow in case it is more onerous than it seems on the surface.

“The other thing I know is true is that companies that have more than 50 employees are looking at ways to cut back many of those employees to less than 30 hours a week,” he adds. “The longer this can be delayed, the better it is for small business in the U.S.”

In a post published on the U.S. Department of Treasury’s website July 2, assistant secretary for tax policy Mark J. Mazur said that after listening to feedback from businesses and consumers, “The Administration is announcing that it will provide an additional year before the ACA mandatory employer and insurer reporting requirements begin. This is designed to meet two goals. First, it will allow us to consider ways to simplify the new reporting requirements consistent with the law. Second, it will provide time to adapt health coverage and reporting systems while employers are moving toward making health coverage affordable and accessible for their employees.

“We recognize that this transition relief will make it impractical to determine which employers owe shared responsibility payments (under section 4980H) for 2014. Accordingly, we are extending this transition relief to the employer shared responsibility payments. These payments will not apply for 2014. Any employer shared responsibility payments will not apply until 2015,” he added.

Mazur further noted that the Obama administration continues to encourage employers to expand coverage options for employees during the 2014 transition period. Read the full post here.

Prior to the announcement, businesses with 50 or more employees were expected to offer health care coverage to employees as of January 1, 2014, or face a variety of penalties for non-compliance.

For more information about the impact of health care reform, read our feature What’s the Deal in the July/August issue of AGRR™ magazine.

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