Health Care Mandate Delayed For More Employers
The Obama administration has delayed the employer-shared responsibility health care requirements for small- to medium-sized businesses by another year.
Treasury Department officials released new rules Monday, which stated that employers with fewer than 100 employees will not need to provide health insurance coverage in compliance with the Affordable Care Act (ACA) until 2016.
The portion of the ACA that was delayed requires employers with more than 50 full-time workers to offer a certain level of health insurance coverage or be subject to monetary penalties—a provision known as “pay or play.” It was originally scheduled to take effect in 2014 but was pushed back to 2015 in July.
The newly announced rule also gives a break to employers with more than 100 workers. While the deadline for these larger employers remains 2015, they will only need to offer coverage to 70 percent of their full-time workers rather than the previously required 95 percent, by next year.
The ACA defines full-time or full-time-equivalent workers as those who work at least 30 hours per week. (The actual calculation can get quite complicated, as it is based on a formula that takes into account average hours worked. Learn how to calculate your full-time employee count here.)
Employer groups and the Minnesota Chamber of Commerce applauded the delay but also took the opportunity to reiterate their disapproval for portions of the ACA.
“We’re pleased that this new delay will give businesses more time to comply with the requirements of the ACA, but we also think it should be seen for what it is—further proof that compliance with the ACA poses serious challenges for businesses,” Bentley Graves, the Minnesota Chamber’s director of health policy, said in an statement emailed to Twin Cities Business.
On the national level, the International Franchise Association (IFA) issued a statement following the delay announcement that echoed the feelings of the Minnesota Chamber.
“This announcement is just another delay that, while positive in the short term for some franchises, only postpones the inevitable and demonstrates that the Affordable Care Act remains a significant problem for employers to implement,” IFA President and CEO Steve Caldeira said in a statement. “By picking winners and losers based on the size of a business, the administration has effectively placed another complicated hurdle on the backs of the small business community in coming to terms with this law.”
The National Retail Federation, which bills itself as the world’s largest retail trade association, released a statement on the announcement that seemed to wholeheartedly approve of the delay.
“The administration should receive a gold medal for recognizing the enormous complexities of the ACA, and its agility and flexibility in working with retailers and others in crafting these much-needed and common-sense reforms and revisions,” Neil Trautwein, vice president and employee benefits policy counsel for the National Retail Federation, said in a statement. “Continued simplicity, streamlining and clarification of the ACA are in the best interest of employers and employees.”
In January, Trautwein testified before the House Ways and Means Committee in an attempt to convince Congress to amend the law by re-defining full-time workers as those who work an average of 40 hours or more per week.
“Many retail and restaurant employees do not fit neatly into full- and part-time categories,” he said in his testimony, “and compliance with the unprecedented levels of change under the ACA will be particularly challenging.”
At that time, the National Retail Federation said it was pushing for “specific, common-sense reforms to the health care law”—including upping the full-time threshold to 40 hours a week and increasing the coverage requirement to companies with 100 full-time employees, rather than 50.
Bruce Nustad, president of the Minnesota Retailers Association, told Twin Cities Business in January that, while his organization “doesn’t have an official position” on the 30-hour threshold, the majority of “main street” retailers his organization represents “would prefer 40 hours to 30 hours.” The 30-hour limit is “less comfortable for them,” he added.
Nustad could not be immediately reached for comment on the most recent delay.
In 2013, Twin Cities Business, with the help of local experts, hosted a webinar and e-newsletter series that explored how employers are responding to the ACA.
Both employers defined as “small” and “large” under the ACA said they were considering a variety of strategies for dealing with the law, including closely monitoring (and perhaps adjusting) their headcount and the hours their employees work.