Brokers and Clients,

As you may have heard, yesterday the Treasury Department announced a one-year delay of the Pay or Play rules and the Pay or Play reporting requirements. Penalties for not offering coverage to full-time employees and dependents, and penalties for not offering affordable, minimum value coverage have been delayed until 2015.  This significantly impacts large employers (50+ employees) who have been in the decision making process of how to move forward with their healthcare plans for 2014.

The Treasury Department noted that their actions DO NOT affect the following:

  • Access to premium tax credits or any other provision of the ACA
  • The PCORI tax
  • The tax on plans to fund a temporary reinsurance program
  • The 90-day limitation on waiting periods
  • The prohibition on preexisting condition exclusions
  • The Exchange Notice
  • The Individual Mandate

Other health insurance reforms have NOT been given a one-year delay in this announcement. Formal guidance on implementing the delay is to be published next week.

According to the announcement, the one-year delay is designed to meet two goals.  First, it will provide time to simplify the new reporting requirements.  Second, it will provide time to adapt health coverage and reporting systems while employers move toward adjusting health coverage to be compliant.  While not mentioned, there are political motivations at play here in delaying the impact of the employer shared responsibility rule in anticipation of next year’s congressional elections.

The delay signals that the Administration is open to hearing from the employer and plan sponsor community about the burdens associated with the Pay or Play rules.

Mid-American Benefits, Inc. will remain close to this topic and keep you updated on the detailed implications of the announcement and will share these as they became available.

IMPORTANT:  This is a delay and not a repeal of Pay or Play.  Mid-American Benefits, Inc. will continue to provide education on this topic. The plan continues for us to have a webinar this summer. In light of this announcement we may delay the date as we want to make sure we have the updated guidance before proceeding. We will keep you posted.