WASHINGTON – After months of conferring with fretful employers, the Obama administration announced Tuesday that it will delay enforcement of the Affordable Care Act’s so-called “employer mandate” until 2015.
A signature provision of the federal health care overhaul, the contentious measure would have required companies with more than 50 full-time employees to provide affordable health insurance or face a penalty of $2,000 per employee in 2014, when the law was set to be fully implemented.
Ninety-six percent of U.S. businesses have fewer than 50 employees and are already exempt from the mandate. The nonpartisan Kaiser Family Foundation estimates that 94 percent of companies with 50 to 199 employees already provide coverage — as do 98 percent of firms with 200 or more workers.
But those numbers don’t tell the whole story. Employees who work 30 or more hours per week are considered “full time” under the law. But one-third of nearly 900 employers surveyed last month by the health care consulting firm Mercer don’t offer coverage to those employees.
These businesses and those with workforces hovering near the 50-employee threshold faced a host of important financial decisions about their health plan enrollment that had to be made by October, when employees begin choosing their coverage for 2014.
The deadlines have left companies large and small scrambling for answers and somewhat bewildered by the red tape, potential costs and tax implications of the new provision. Hamstrung by funding shortages that have limited its outreach efforts, the Obama administration has not done a good job of explaining the legislation to employers.
In announcing the delayed enforcement of the employer mandate, White House special adviser Valerie Jarrett said employers needed more time to comply with the new rules, which require extensive reporting about the specifics of employees’ coverage in order to assess the penalties.
“As we implement this law, we have and will continue to make changes as needed,” Jarrett said in a statement. “In our ongoing discussions with businesses we have heard that you need the time to get this right. We are listening.”
News of the decision to delay the employer mandate sparked unanimous praise from the business community.