A batch of employers won’t face a fine next year if they fail to provide health insurance to their workers, the Obama administration said Monday.
In regulations outlining the Affordable Care Act, the Treasury Department said employers with between 50 and 99 full-time workers won’t have to comply with the law’s requirement to provide insurance or pay a fee until 2016.
Companies with 100 workers or more could avoid penalties in 2015 if they showed they were offering coverage to at least 70 percent of their full-time workers, the Treasury said.
The move is a new, significant revision of the law after a series of delays and a troubled rollout. Originally, employers with the equivalent of 50 full-time workers or more had to offer coverage or pay a penalty starting at $2,000 per worker beginning in 2014.
That so-called employer mandate was seen as a cornerstone provision in the law’s goal of expanding insurance coverage to millions of Americans this year. But last summer the administration announced a surprise one-year reprieve in enforcement of the requirement, from 2014 to 2015.
Monday’s announcement of further delays comes as the administration weighs how much of the law to adjust in the wake of the rollout and the looming prospect of midterm elections.
A senior administration official said the shift reflects the administration’s observations on the law’s implementation and its willingness to acknowledge business concerns, though the official said that no single reason was behind the change.
Most large employers offer coverage to their workers, though not all employees accept it. Many of the companies that don’t offer coverage have fewer employees and are in lower-wage areas such as the hospitality, retail and agriculture sectors. They have been among the most vocal about the impact of the new requirements.
Some of those employers had begun trimming workers’ hours as a way to reduce their exposure to penalties, since the requirement to cover workers only applies to employees clocking 30 hours a week or more.
The administration also signaled on Monday that big employers that currently offer coverage voluntarily will likely see simpler requirements for how to prove that. However, full regulations detailing the reporting requirements haven’t been released, senior Treasury officials said.
Under the new rules, companies would be allowed during the phasing-in year to offer coverage specifically to a subset of employees, such as those working 35 hours or more a week, the Treasury said.
Senior Treasury officials said the shift was aimed at giving more time for smaller employers subject to the requirement to adjust and for all companies to consider the number of hours their employees worked and whether they could avoid cutting them.
The officials said employers who wanted to use the phase-in period would have to certify that they hadn’t decreased their employee numbers in order to qualify.
Treasury also set new rules for how the requirement would apply to workers such as volunteers and seasonal employees, saying that employers wouldn’t be penalized for failing to offer those people coverage, regardless of the number of hours they were working.
In recent months the administration has made a series of changes to the law that have further blunted its full impact this year. It has asked insurers to temporarily reinstate policies that had been canceled because they didn’t meet new requirements set by the law, even though the administration had previously described those plans as inadequate.
The botched launch of online insurance portals also prompted the Congressional Budget Office to revise its estimates for the number of people who would use the exchanges this year to 6 million, as well as another 8 million people who would gain coverage by signing up for Medicaid.
Wall Street Journal, Monday, February 10, 2014
By Louise Radnofsky
By Louise Radnofsky
