Major Development–Employer Mandates Under Affordable Care Act Delayed Until January 1, 2015

On July 2, 2013, the United States Treasury Department announced that implementation and enforcement of the shared responsibility mandate("employer mandate") under the Patient Protection and Affordable Care Act (“Act”) will be delayed by one year. Until today, employers were preparing to be in compliance with the Act starting on January 1, 2014. As a result of today’s announcement, employer shared responsibility penalties will not be enforced until January 1, 2015. Concerning the tax penalties that could impact large employers for failing to comply with the Act, the Treasury Department said:

"We recognize that this transition relief will make it impractical to determine which employers owe shared responsibility payments (under section 4980H) for 2014. Accordingly, we are extending this transition relief to the employer shared responsibility payments. These payments will not apply for 2014. Any employer shared responsibility payments will not apply until 2015."

The Treasury Department’s stunning announcement was the result of “concerns about the complexity of the (employer reporting) requirements and the need for more time to implement them effectively.” We expect new regulations specific to these new developments to be issued later this week or early next week. Please subscribe to our blog and our alerts for the latest on this development.

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