According to Forbes the Obama administration has decided to delay the implementation of the Employer Mandate of the Affordable Care Act (ACA) to 2016. The delay is due to many insurers’ and employers’ time limitations to comply with the mandate in order to work out logistics with separate health care providers. Some employers will now have more time before they have to offer insurance to their full-time workforce.
Federal officials stated “the reason for the ACA delay is many insurers and employers needed more time to comply because they used separate companies to help administer major medical coverage and drug benefits, with separate limits on out-of-pocket costs. In many cases, the companies have separate computer systems that cannot communicate with one another.”
Changes for Mid-Sized Businesses
Employers with 50-99 workers will have until 2016 to comply with the mandate. This date represents the second delay of this controversial provision. The penalties were initially scheduled to go into effect in 2014, before being delayed last summer to 2015. The new delay gives mid-size businesses more time before facing the $2,000 or $3,000 penalties for failing to provide minimum essential coverage to eligible employees.
According to the Wall Street Journal the change for mid-sized businesses will impact about 2% of all American businesses and 7% of all workers, or 7.9 million people. Employers with fewer than 50 full-time equivalent workers currently have no obligation to provide coverage under the law.