On July 2, 2013, the Obama Administration delayed the Affordable Care Act or “play-or-pay” rules for one year to 2015. According to Brown & Brown Northwest, the Administration’s decision is due to businesses’ concerns about the complexity of the requirements and the need for more time to implement them effectively. Here are highlights for large employers of 50 or more full-time employees to take note of.

What the delay means for Employers:

  • Employers have another year to determine their status as an applicable large employer
  • Applicable large employers have another year to redesign health plans to cover more employees or reduce employee contributions to assure affordability
  • Employers with several part-time or seasonal workers have another year to establish a system to monitor hours or employ workers more effectively

Mandates still scheduled for 2014:

  • The 90-calendar-day cap on waiting periods for new employees to receive coverage
  • The prohibition of annual benefit limits, which may be problematic for health reimbursements for employees not covered by the employers regular medical plan
  • Deductibles will be capped for small employer’s health insurance plans and out-of-pocket maximums in all medical plans

Note: New rules prohibiting discrimination in favor of highly compensated individuals in non-grandfathered, insured medical plans may take effect for plan years beginning in 2014, though that depends on when the IRS issues guidance interpreting the new rules.

Next steps:

It is important to continue planning for the mandates scheduled to take place on January 1, 2014, and to use the extra year to figure out how to best respond to the play-or-pay mandate now effective January 1, 2015.
The administration plans to use the additional year to simplify the new reporting requirements consistent with ACA.
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