Delay of employer mandate raises questions

Today's guest blogger suggests administration of federal subsidies through the public exchanges will be much tougher now that the employer mandate has been delayed. What other questions does the delay raise? Share your thoughts in the comments. —Andrea Davis, Managing Editor

The healthcare industry was shaken up last week when it was announced that the Obama Administration is delaying large employer compliance with the Employer Mandate standards and its reporting rules until 2015. The reasons for the delay, according to the administration, are additional time, the opportunity for regulators to simplify employer reporting requirements, health coverage adaptation and adequate planning time to satisfy employer mandate rules.

The announcement provided the following guidance, as defined by The Patient Protection and Affordable Care Act, for employers with 50 or more full-time employees:

• The payment of any penalties related to the employer shared responsibility (mandate) requirements will not apply until the 2015 plan year.

• The related reporting requirements similarly are delayed.

• The regulatory agencies will issue regulations next week that further explain this delay and the transition to 2015 compliance.

• Proposed regulations on the reporting requirements will be issued this summer in hopes employers will voluntarily comply during 2014 and enable the administration to simplify and fine-tune them for 2015.

As employee benefits brokers and advisers, we see this delay as an opportunity to give many of our clients room to breathe – especially those in the restaurant and hospitality industries, who would be most impacted by potential penalties.
The individual mandate feature of the law still applies, which interestingly may give employees more freedom to choose between their employers' plan or the public health exchanges. However, it seems administration of the federal subsidies through the public exchanges will be much more difficult without the employer mandate reporting and compliance rules. While the administration acknowledged the outcry from a lot of businesses, the delay will take some of the pressure off the government’s implementation timeline for the public exchanges and employer guidance on healthcare reform law provisions.

Daniel Prescott is senior vice president at Prescott Pailet Benefits, a Marsh & McLennan Agency, in Dallas, Texas. He can be reached at dprescott@prescottpailet.com