Delay in Implementation of Potential Employer Penalties Under ACA [July 16, 2013]   [open pdf - 282KB]

"The Patient Protection and Affordable Care Act (ACA, P.L. 111-148), as amended, attempts to increase access to health insurance coverage, expands federal private health insurance market requirements, and requires the creation of health insurance exchanges to provide certain individuals and small employers with access to insurance. To ensure that employers continue to provide some degree of coverage, ACA includes a 'shared responsibility' provision. This provision does not explicitly mandate that an employer offer employees health insurance; instead, ACA imposes penalties on 'large' employers if at least one of their full-time employees obtains a premium credit through the newly established exchange. A companion provision to the employer requirements is the ACA requirement for most individuals to maintain health insurance coverage ('individual mandate') or pay a penalty, with exceptions. These provisions are effective in 2014 according to the ACA statute. On July 2, 2013, the Obama Administration announced that it is going to delay, until 2015, enforcement and associated reporting requirements relating to potential employer penalties under ACA. On July 11, 2013, the IRS [Internal Revenue Service] released Notice 2013-45, which provided more detailed information on this decision. This delay may have implications for the individual mandate and eligibility for tax assistance provided through the exchanges. It also may have some impact with respect to federal spending and revenues. This report summarizes some of these issues; however, it does not attempt to identify all possible implications of this delay. This report does not address whether the Obama Administration has legal authority to delay implementation of ACA reporting requirements and enforcement of the employer penalty."

Report Number:
CRS Report for Congress, R43150
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