Health care bill's employer mandate delayed one year

Restaurant industry association leaders welcomed the Obama administration’s announcement on Tuesday to delay the Affordable Care Act’s employer mandate for one year.

The bill originally mandated that businesses with more than 50 full-time employees must offer health care insurance to their workers by Jan. 1, 2014, or pay a penalty.

The U.S. Treasury Department said the decision stemmed from widespread complaints from the business community that the law’s reporting requirements were overly complicated and would be difficult to implement by the original deadline.

“We have heard concerns about the complexity of the requirements and the need for more time to implement them effectively,” said Mark Mazur, assistant treasury secretary for tax policy, on his blog. “We recognize that the vast majority of businesses that will need to do this reporting already provide health insurance to their workers, and we want to make sure it is easy for others to do so.”

As a result, Mazur said, the Obama administration “will provide an additional year before the ACA mandatory employer and insurer reporting requirements begin.”

This action will address two goals, he wrote. “First, it will allow us to consider ways to simplify the new reporting requirements consistent with the law. Second, it will provide time to adapt health coverage and reporting systems while employers are moving toward making health coverage affordable and accessible for their employees.”

Under the ACA, businesses with more than 50 full-time employees that do not offer health insurance would have to pay a penalty of $2,000 per uninsured worker after the first 30 employees.

Mazur said formal guidance describing the transition would be published next week.

The delay is not expected to affect other key provisions of the ACA. For example, health exchanges where individuals can purchase insurance are still expected to open by Oct. 1.

Industry associations praised the decision and characterized it as a sign that the White House has been taking the industry’s concerns about health care reform seriously.

“We view today’s announcement as recognition that the administration has listened to the National Restaurant Association about the concerns of our members, the complexity of the requirements and the need for additional time to be able to comply effectively,” said Dawn Sweeney, president and chief executive of the National Restaurant Association.

The NRA also said it “strongly encourages employers to voluntarily report information in respect to the health care coverage offered to full-time employees, in preparation for the full implementation in 2015.”

Steve Caldeira, president and chief executive of the International Franchise Association, said the delay would “relieve the onerous and costly burdens of the ACA for one year and allow the administration to ensure that the Affordable Care Act is implemented with minimal negative impact on franchise small business owners.”

Neil Trautwein, vice president and employee benefits policy counsel for the National Retail Federation, parent of the National Council of Chain Restaurants, commended the administration’s decision, saying, “This one-year delay will provide employers and businesses more time to update their health care coverage without threat of arbitrary punishment.”

In the meantime, association leaders have said they would like to see even more relief enacted for employers.

For example, a U.S. Senate bill seeking to change the definition of a full-time worker as it applies to the federal health-care reform law has attracted support from association executives. Introduced in April by Susan Collins, R-Maine, the measure, called the Forty Hours is Full Time Act of 2013, would redefine a full-time employee as one who works 40 hours a week or 174 hours a month based on a 52-week year.

Currently, the Patient Protection and Affordable Care Act states that businesses with more than 50 full-time workers must provide health insurance for full-time employees who work either 30 hours per week or 130 hours per month.

The industry is also watching another measure introduced into the U.S. House of Representatives last week. Rep. Luke Messer, R-Ind., introduced a bill that would change the definition of a “large employer” from the current 50 or more full-time employees to 100 or more.

Contact Paul Frumkin at [email protected].
Follow him on Twitter: @NRNPaul