Friday, July 5, 2013

Employer Mandate Enforcement Delayed Until 2015

On July 2, 2013, the Obama Administration announced that enforcement of the employer mandate provision of the Affordable Care Act would be delayed until 2015, a year from its projected January 2014 start.

The mandate requires that businesses with 50 or more full-time equivalent employees provide affordable health insurance for those employees or pay penalties. The administration has been under substantial pressure to delay the mandate, in large part because employers are still struggling with understanding and implementing the provisions. Some small businesses had even considered reducing their workforces below the 50-employee threshold or cutting employee hours to escape penalties for not providing coverage.

While this announcement should not immediately create roadblocks for other ACA provisions, many critics point to the delay as the first sign of the unraveling of so-called “Obamacare.” The individual mandate, which will require most Americans to carry health insurance, is still set for 2014. State health exchanges, which will allow small businesses and individuals without employer-based insurance to shop for health coverage with the help of government subsidies, are still scheduled for launch in October. While Kentucky has its exchange in place, progress varies by state.

The Government Accountability Office, Congress’ nonpartisan investigative arm, released a report on June 19th that casts doubt on whether exchange deadlines can be met. “Much progress has been made, but much remains to be accomplished within a relatively short amount of time,” the GAO report said. “Whether these efforts will assure the timely and smooth implementation of the exchanges by October 2013 cannot yet be determined.”

Stay tuned, as we wait to see if the Obama Administration can pilot the rest of the long-awaited health reform into implementation on time.

Clay B. Wortham
McBrayer, McGinnis, Leslie & Kirkland, PLLC
Lexington, Kentucky

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