First they delayed the employer mandate until 2015, but now the Obama Administration has changed the plan again and decided to instead implement a two-phase installation of the mandate.
The overall goal is the same: get all employers with 50 or more full-time equivalent employees to provide affordable health insurance to 95 percent of those employees or else face federal penalties.
The new two-phase model will look like this:
Phase 1: Employers with at least 100 full-time employees will be able to avoid federal penalties if they offer affordable coverage to at least 70 percent of those workers by January 1, 2015. The previouls 95 percent requirement has now been pushed back to the start of 2016.
Phase 2: Employers with between 50 and 99 full-time employees will now be required to offer affordable coverage to 95% of those workers by January 1, 2016 (versus January 1, 2015) in order to avoid federal penalties.
According to the IRS, which issued the rules, this new model will essentially give medium-sized businesses yet another year to prepare for compliance with the law. However, some lawmakers who have long opposed the law suggest that the delay is intended to diffuse criticism of the Affordable Care Act until mid-term elections are finished in the fall.
It should also be noted that the new IRS rule, which will be published in an upcoming issue of the Federal Register, also states that employers will be required to confirm they’re not cutting employees’ hours or laying off workers to avoid federal penalties under the employer mandate. However, the IRS has yet to issue specifics on how that rule will be enforced.
What do you think about the delay? Will it help your business out? Leave us a note in the comments.