Delay Announced for Penalties and Reporting Requirements of the Employer Shared Responsibility Provisions

The Obama Administration announced on Tuesday, July 2, 2013, that it would delay the penalties and reporting requirements of the Employer Shared Responsibility provisions (also known as the employer “play or pay” mandate) of the Affordable Care Act (ACA) until 2015. The Administration’s announcement added, that “within the next week, we will publish formal guidance describing this transition.”  The announcement noted that the decision to delay was in response to comments from interested parties concerned with the complexity of the proposed Shared Responsibility regulations amid looming implementation deadlines.  The announcement further noted that the delay would allow time to consider ways to simplify the new reporting requirements consistent with the law and provide time to adapt health coverage and reporting systems while employers move toward making health coverage affordable and accessible to their employees.  Accordingly, both the employer and insurer reporting requirements – and any penalties under the employer mandate – have been delayed until 2015.
 
In the interim, the Administration intends to simplify certain requirements under the ACA that will now be effective in 2015 – annual informational reporting under Sections 6055 and 6056 of the Internal Revenue Code:  

•   Section 6055 reporting is required by insurers and employers that sponsor self-insured plans on each individual for whom they provide the coverage.  

•   Section 6056 reporting generally applies to certain large employers with respect to the terms and conditions of health coverage offered to their full-time employees during the prior year.  

It is expected that these reporting requirements will be part of any enforcement mechanism used to assess penalties due under the employer mandate or the individual mandate (the individual mandate continues to be effective in 2014, although individuals who are eligible for non-calendar year coverage may wait until their 2014 plan year to enroll without penalty).  Additional guidance simplifying these reporting requirements is expected later this summer. 

The announcement also stated that the Administration is working to adapt and be flexible about reporting requirements as it did back in April, when it turned the initial 21-page application for health insurance into a three-page application. During the transition period in 2014, the Administration encourages employers to voluntarily extend coverage to employees in accordance with the employer mandate, in preparation for 2015.  
 
The delay does not affect the availability of premium credits for individuals eligible for federal subsidies (although without the informational reporting under Sections 6055 and 6056, it remains to be seen how eligibility for such credits will be verified).  Nor does the delay affect any other provision of the ACA.  
 
In the short term, the delay reduces the financial and regulatory burdens on businesses that otherwise had to comply by 2014 with the employer “play or pay” mandate. Employers should continue to evaluate their options under the ACA and monitor changes to these requirements.   

If you would like to subscribe to Eye on Washington alerts, please visit:  www.adp.com/regulatorynews.

ADP values your feedback. If you haven’t taken our very brief satisfaction survey focused on the Eye on Washington communication, please do so by visiting: https://www.surveymonkey.com/s/EyeonWashington.

ADP Compliance Resources
ADP maintains a staff of dedicated professionals who carefully monitor federal and state legislative and regulatory measures affecting human resource, payroll, tax and benefits administration, and help ensure that ADP systems are updated as relevant laws evolve. For the latest on how federal and state tax law changes may impact your business, visit the ADP Eye on Washington Web page located at www.adp.com/regulatorynews.

ADP is committed to assisting businesses with increased compliance requirements resulting from rapidly evolving legislation. Our goal is to minimize your administrative burden across the entire spectrum of payroll, tax, HR and benefits, so that you can focus on running your business. This information is provided as a courtesy to assist in your understanding of the impact of certain regulatory requirements and should not be construed as tax or legal advice. Such information is by nature subject to revision and may not be the most current information available. ADP encourages interested readers to consult with appropriate legal and/or tax advisors. Please be advised that calls to and from ADP may be monitored or recorded.  

If you have any questions regarding our services, please call 1-800-CALL-ADP (1-800-225-5237).

The ADP logo, ADP, and In the Business of Your Success are registered trademarks of ADP, Inc. 
All other trademarks and service marks are the property of their respective owners.
Copyright ©2013 ADP, Inc. Printed in the USA 
Last updated: July 3, 2013

ADP, Inc.
1 ADP Boulevard, Roseland, NJ 07068
adp.