During last week’s Fourth of July holiday break, the Obama Administration announced a one-year delay in penalties and reporting requirements that larger employers would have faced beginning next year under the Affordable Care Act (ACA) if they did not offer health coverage to their workers.  White House Senior Advisor Valerie Jarrett and Treasury Department Assistant Secretary for Tax Policy Mark Mazur explained the reasoning behind the decision to delay the mandates until January 2015.  First, it would allow the Administration to consider ways to simplify the new reporting requirements consistent with the ACA, and second, it would provide businesses with an extra year to test the new reporting systems and make any necessary adaptations to their health benefits.  The Administration officials also made it clear that these two delays would not derail the progress of the new health insurance exchanges, which are still on track to begin an open enrollment period on October 1, 2013.  The Centers for Medicare & Medicaid Services (CMS) followed three days later with an updated final rule that supplements the exchange final rule, which includes finalized exchange and Medicaid and Children’s Health Insurance Program (CHIP) provisions associated with the eligibility changes under the ACA.  The final rule addresses aspects of the Medicaid, CHIP and Marketplace eligibility notices and appeals processes; provides additional flexibility regarding benefits and cost sharing for state Medicaid programs; codifies several eligibility and enrollment provisions included in the ACA and provides operational guidance to help states implement their Health Insurance Marketplaces.  The rule will be published in the Federal Register on Monday, July 15.

Republican lawmakers were quick to respond to the Administration’s decision to delay the employer mandate and reporting requirements.  On Tuesday, July 9, House Republican leaders and Committee chairs sent a letter to President Obama requesting further information regarding the implications of the delay.  The letter also asked the President to justify delaying the employer mandate while leaving in place the mandate on individuals and families.  “We agree with you that the burden was overwhelming for employers,” they wrote, “but we also believe American families need the same relief.”  The following day, all GOP Senators signed onto Senator John Thune’s (R-SD) letter to the President , in which they said, “While your action finally acknowledges some of the many burdens this law will place on job creators, we believe the rest of this law should be permanently delayed for everyone in order to avoid significant economic harm to American families.”  The House Ways and Means Committee quickly scheduled a hearing on the matter.  On Wednesday, July 10, the Health Subcommittee met to hear testimony on “The Delay of the Employer Mandate.”  Additionally, the House Energy and Commerce Oversight and Investigations Subcommittee scheduled a hearing for July 18 on the recent implementation decisions, including delayed enforcement of the employer mandate.  In preparation for the hearing, Republican members of the Committee sent a letter to Treasury Secretary Jacob Lew seeking details on the employer mandate delay.  The Committee received a response from Assistant Secretary Mazur, in which he describes the process by which the decision was made and the department’s legal authority for the decision.

Finally, House Speaker John Boehner (R-OH) announced that, in response to the Administration’s decision to delay enforcement of the employer mandate, the House will hold two votes next week: (1) to delay the employer mandate for one year and (2) to delay the individual mandate for one year.  The House Rules will meet Tuesday, July 16 to write the rules for the two bills:  the Authority for Mandate Delay Act (H.R. 2667) and the Fairness for American Families Act (H.R. 2668).  Meanwhile, on Thursday, July 18, the Senate Appropriations Committee will take up the Labor, Health and Human Services and Education spending bill, and Senator Jerry Moran (R-KS) is expected to offer an amendment delaying the individual mandate for FY 2014.

The Administration’s decision to delay the ACA employer penalties and reporting requirements for one year clearly has taken some of the immediate pressure off employers.  As we head into the heart of the summer, it remains to be seen whether the decision will turn down – or turn up – the heat on supporters of the law.

This information provided courtesy of the Employers Council on Flexible Compensation
(ECFC), of which Glynn Griffing & Associates is a proud member.

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