Author: Tracy Morley, XpertHR Legal Editor

July 3, 2013

The Obama administration announced that the employer mandate and associated insurer reporting requirements under the Affordable Care Act (ACA), originally scheduled to go into effect in 2014, will be delayed until 2015. The employer shared responsibility requirements, often referred to as the employer, or pay-or-play mandate, require an employer to provide health coverage to its employees or pay a penalty.

This unexpected move is in response to concerns expressed by the business community about the complexity of the ACA's reporting requirements and the need for more time to effectively implement them.

According to Mark Mazur, the Treasury Department's assistant secretary for tax policy, the one-year postponement "will allow us to consider ways to simplify the new reporting requirements consistent with the law," and "provide time to adapt health coverage and reporting systems while employers are moving toward making health coverage affordable and accessible." In his statement, Mazur encouraged employers to maintain or expand health coverage during the 2014 transition period. It is expected that formal guidance on the delay will be published within the next week.

The delay in implementing these requirements raises questions regarding the timely implementation of the health insurance exchanges under the ACA and comes on the heels of a report issued by the Government Accountability Office questioning whether or not the exchanges will be prepared for open enrollment by the October 1 deadline. In a recent blog post, Valerie Jarrett, a senior advisor to President Barack Obama said "Starting next year, the law also ensures all Americans will have access to affordable health coverage. We are on target to open the Health Insurance Marketplace on October 1 where small businesses and ordinary Americans will be able to go to one place to learn about their coverage options and make side-by-side comparisons of each plan's price and benefits before they make their decision."

The one year delay in implementing these requirements comes as welcome news for employers struggling to comply with these complex rules.