One of the more highly publicized provisions of the Patient Protection and Affordable Care Act of 2010 (“PPACA” or “health care reform law”) is the requirement that so-called “large” employers provide adequate health care coverage for workers and, if they fail to do so, pay a penalty. This “employer mandate” was to go into effect on January 1, 2014. Recently, however, the Obama Administration announced that it would delay enforcement of the employer mandate provision for one year.
Under PPACA, “applicable large employers” must comply with the principal requirement that they offer employees health care coverage that meets specified standards or be subject to penalties. An “applicable large employer” is an employer that employed an average of at least 50 full-time (or full-time equivalent) workers on business days during the preceding calendar year. The penalty for not providing coverage is at least $2,000 for each worker who should have been covered. The law is complex — several special requirements and exceptions apply.
Enforcement of this employer mandate (including the penalty provisions) is now delayed until 2015.
Note that the so-called “individual mandate,” which under the health care reform law requires most Americans to carry health insurance or pay a fine, continues to be effective starting in 2014. The newly announced enforcement delay applies only to business penalties (though some lawmakers are urging the Administration to delay the individual mandate as well). Employees who aren’t provided appropriate coverage through an employer or otherwise will remain eligible for tax credits to help pay for the cost of purchasing their own coverage.