On February 10th, the Obama administration announced that it again will delay aspects of the Affordable Care Act’s employer mandate, the New York Times reports.
The employer mandate requires businesses with more than 50 employees working 30 hours or more per week to provide affordable health insurance coverage to workers or face fines.
Details of Delay
The Department of Treasury and the Internal Revenue Service on Monday released a final rule that outlined the enforcement timeline of the mandate (Treasury release, 2/10). The changes included in the new regulations will affect both mid-sized and large companies.
Mid-sized businesses that employ 50 to 99 full-time workers will have another year to provide health insurance coverage to employees. These employers will not face fines for failing to provide coverage to workers until 2016, according to the final rule.
Meanwhile, businesses that employ 100 or more full-time workers will be subject to the mandate starting in 2015. However, the final rule gives these employers more time to ramp up coverage. To avoid fines, large employers only need offer coverage to 70% of workers in 2015, rather than 95%. They will need to start offering coverage to 95% of workers in 2016.
The Department of Treasury in a news release noted that the rule change does not affect businesses that employ fewer than 50 individuals because the ACA does not require them to provide coverage to employees.
As a result, the employer mandate and the timeline change thus will affect only 4% of employers, according to the release (Treasury release, 2/10). However, the Washington Post notes that those businesses employ about 72% of all U.S. residents.
Department of Treasury official Mark Mazur said, “While about 96% of employers are not subject to the employer responsibility provision, for those employers that are, we will continue to make the compliance process simpler and easier to navigate.”
Mazur added, “Today’s final regulations phase in the standards to ensure that larger employers either offer quality, affordable coverage or make an employer responsibility payment starting in 2015 to help offset the cost to taxpayers of coverage or subsidies to their employees”.
The delay is the second such timeline change to the mandate. The White House in July 2013 announced that it would push back enforcement of the mandate — which was slated to begin on Jan. 1, 2014 — by one year.
Other Provisions
The new final rule also clarified that volunteers will not be considered employees under the ACA. According to AP/Modern Healthcare, some volunteer fire departments worried that they would be required to provide coverage to volunteer firefighters.
In addition, the rule said that the government will consider each hour of class time that an adjunct faculty member works as two hours and 15 minutes of work. As such, a faculty member spending 15 hours in the classroom each week will be considered full time.