Healthcare Update: Employer ‘Play or Pay’ Delayed until 2015

The White House announced just before the July 4^th holiday that it is delaying until 2015 the employer penalties under the Affordable Care Act (ACA).

Prior to the announcement employers with more than 50 employees were faced with having to decide whether to “play or pay”– that is whether to offer health insurance that meets federal guidelines, or pay a per-employee penalty.

Now, employers will have more time to better understand the new requirements included in federal healthcare legislation before possibly facing a financial penalty.

According to the White House, it heard concerns from the business community about the reporting mandated under the ACA, and therefore decided to delay certain reporting requirements.

Absent these reporting mandates, the employer penalty can’t be assessed and therefore won’t be collected in 2014. 

It’s anticipated that the federal government will issue additional guidance in the coming days, with pertinent regulations to be finalized over the summer. CBIA will provide updates as more information becomes available. 

The reporting delay is especially helpful for those companies calculating the number of full time equivalent (FTE) employees they have in order to determine whether their business breaks the ACA’s threshold of 50 FTE. This is critical because only companies with 50 or more FTE will face potential penalties for not offering, or offering insufficient, healthcare plans.

Businesses also will have more time to make arrangements for the new reporting requirements and consider the consequences of the play or pay law.

A link to the White House blog post about the delay and more information about how to calculate FTE employees can be found at the CBIA Healthcare Resource Center. 

For more information, contact CBIA’s Jennifer Herz at 860.244.1921 or jennifer.herz@cbia.com.