Employer Mandate Delayed for a Second Time
February 14, 2014
The Obama administration announced on Monday that it would postpone enforcement of a federal requirement for medium-size employers to provide health insurance to employees and allow larger employers more flexibility in how they provide coverage.
The “employer mandate,” which was originally supposed to take effect last month, had already been delayed to Jan. 1, 2015, and now the administration says that employers with 50 to 99 employees will not have to comply until 2016 — allowing supporters to placate business concerns and pushing the issue well beyond this year’s midterm elections.
In addition, the administration said the requirement would be put into effect gradually for employers with 100 or more employees. Employers in this category will need to offer coverage to 70% of full-time employees in 2015 and 95% in 2016 and later years, or they will be subject to tax penalties.
“Today’s final regulations phase in the standards to ensure that larger employers either offer quality affordable coverage or make an employer responsibility payment starting in 2015,” said Mark J. Mazur, the assistant Treasury secretary for tax policy. The purpose of the penalty, he said, is to help offset the cost to taxpayers of providing coverage or subsidies to people who cannot get affordable health insurance at work.
Under the law, employers with fewer than 50 full-time employees are generally exempt from the requirement to offer coverage. The administration described the new policy as a form of “transition relief” to help employers adjust to requirements of the 2010 health care law.