On July 2, 2013, in a surprise move, the Department of the Treasury announced that it is delaying the Affordable Care Act (ACA) employer pay-or-play mandate and accompanying employer reporting requirements by one year. Accordingly, employers will not be subject to penalties for failing to offer full-time employees healthcare coverage that meets certain standards until 2015. Under Section 4980H of the Internal Revenue Code (IRC), “applicable large employers” must offer their full-time employees “minimum essential coverage” that provides “minimum value” and is “affordable” or pay a penalty. The question of whether to play by offering such coverage or pay the penalty has become an important issue for many employers, and one that involves strategic choices about benefits structure and workforce composition. The delay comes as a relief to employers who were scrambling to prepare for the mandate’s 2014 effective date. While the delay is certainly welcome news for employers, it does not mean that they can ignore the ACA or the critical decisions it calls upon employers to make.
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