ESR Provisions Delayed for Employers Until 2015

ESR Provisions Delayed for Employers Until 2015

On July 2nd, the U.S. Department of the Treasury announced a one year delay in the enactment of the Employer Shared Responsibility (ESR) provisions of the Affordable Care Act until January 2015.

 The ESR provisions, also known in the press as the “Employer Mandate,” state that the responsibility of applicable large employers—that is, employers who have 50 or more full-time employees and full-time equivalent employees—must provide qualified and affordable health insurance to their full-time employees and dependents or face a financial penalty. 

The U.S. Treasury Trying to Ease the Transition

In the Web announcement, The U.S. Treasury Press Release, states in part:

The Administration is announcing that it will provide an additional year before the ACA mandatory employer and insurer reporting requirements begin.  This…will allow us to consider ways to simplify the new reporting requirements consistent with the law [and] will provide time to adapt health coverage and reporting systems while employers are moving toward making health coverage affordable and accessible for their employees. 

Beginning January 1, 2014, if the bill was to be implemented as planned, the aforementioned large employers, who did not comply by offering health coverage to full-time employees and dependents, would have faced penalties. With this announcement, employers will not face a potential penalty for not offering adequate coverage until January 1, 2015. Additionally, the related IRS reporting requirements that applied to 2014 and were causing employers much confusion because of the many revisions made since the original enactment of the ACA, have also been delayed until 2015.

As of now, the other major 2014 health care reform provisions remain in place, including the individual mandate (the requirement for most U.S. residents to obtain health insurance coverage) and the launch of the federal and state Health Insurance Marketplaces (formerly called “Exchanges”).

Boehner Seizes the Moment

Of course the delay has given House Speaker Boehner a bit of an opening which is pleasing opponents of the ACA and members of the GOP. According to a report in The New York Times yesterday, Boehner is aggressively urging representatives in the House to insist on legislation that would delay the individual mandates as well for one year. According to the article, Boehner confronted his peers in a closed door gathering saying:

Is it fair for the president of the United States to give American businesses an exemption from his health care law’s mandates without giving the same exemption to the rest of America? Hell no, it’s not fair. 

More to Come…

The U.S. Treasury report was apparently put in place in an effort to ease the reporting requirements on small business as well as help with the transition. The release alludes to more help on the way during this transition year in the form of even more clarification of reporting rules and requirements. However it also says:

During this 2014 transition period, we strongly encourage employers to maintain or expand health coverage.  Also, our actions today do not affect employees’ access to the premium tax credits available under the ACA (nor any other provision of the ACA).



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