The Obama administration this week announced a further extension of the Affordable Care Act’s employer mandate, which was originally scheduled to take effect January 1 but has been extended once before to 2015.
The latest extension gives employers with 50-99 full-time employees until 2016 to offer compliant insurance plans to their employees working 30 hours or more. Employers with 100 or more employees will still be subject to the mandate as of January 1, 2015, but will only be expected to offer coverage to 70 percent of employees for 2015
While the move provides greater relief to companies as they implement necessary changes and updates, the announcement has reignited calls for the administration to grant similar extensions to the individual mandate. The individual mandate went into effect January 1 as scheduled, though consumers have until March 31 to enroll in a qualifying healthcare plan before penalties are assessed.
Employers affected by the mandate extension make up four percent of businesses in the United States, at two percent each. Large companies comprise nearly three-quarters of the working population; however, as the administration points out the majority of those companies already offer some form of compliant healthcare plans to their employees.
In addition to the employer mandate extension, the final employer responsibility rule released by the IRS governs:
- Determining whether an employer is a “large” or “small” employer
- Determining whether an employee is full-time or not
- Applying $2,000 and $3,000 penalties for failure to comply
- Transition provisions to promote smooth implementation of requirements
The effects of the final rule and employer mandate extension remain to be seen; we will continue to update as new information becomes available.
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