By Keiter CPAs
By Marian Kiernan
On July 2nd, via the White House Blog and the Treasury Blog, the Administration announced that the Affordable Care Act’s (ACA’s) mandatory employer and insurer reporting requirements will be postponed for one year to January 1, 2015. What does this mean? For 2014, large employers (generally those with 50 or more full time workers) will not be required to: 1) provide full time employees with health insurance, 2) will not have to fulfill governmental reporting requirements, and 3) will not be assessed any of the Affordable Care Act’s penalties.
No other provisions of the ACA will be effected by this postponement. The Obama Administration still plans to open the health insurance exchanges on October 1, 2013 and the individual mandate will still be in effect for 2014.
The Administration states the delay is to give Treasury time to simplify the new reporting requirements consistent with the law, and provide time to adapt health coverage and reporting systems. In a notice released last week, the IRS issued formal guidance on the transitional relief and encouraged employers and insurers to voluntarily comply with the proposed rules for information reporting for 2014. The IRS asserts that testing of reporting systems and plan design through voluntary compliance in 2014 will help to ensure a smoother transition for the full implementation of the rules in 2015.
The IRS intends to propose regulations this summer for the information-reporting provisions that will now be fully effective in 2015. Keiter will be posting on proposed regulations as they are released.
The delay takes the pressure off of businesses, especially those flirting with the qualification of being classified as a large employer. Keiter recommends that you contact your tax advisor to evaluate your business’ classification.
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