One Year Extension of the ACA Employer Mandate

By Scott Dondershine, CPA, Esq.

In June of this year, our firm issued a Client Alert concerning the employer mandate provisions of the Patient Protection and Affordable Care Act ("ACA"). We discussed in the June Client Alert the obligation beginning in 2014 of "large employers" to provide adequate and affordable coverage to their full-time employees or to pay one of two different types of penalties. In other words, a choice to "pay or play".

Many businesses have discovered that there are various significant technical issues representing obstacles to understanding the obligations of businesses under the ACA. Proposed rules for some of the requirements have not even been issued yet.

The U.S. Treasury Department issued transitional relief in July, approximately one month after we issued our June Client Alert. The relief, issued in Notice 2013-45, provides a one year extension to 2015 for certain information reporting requirements and the employer mandate. The requirements are instead optional in 2014 and become mandatory in 2015. The purpose of the extension is to provide additional time for input from employers and others and to resolve the myriad of complex issues regarding implementation of the ACA. The extension does not affect other provisions of the ACA including the requirement discussed in the June Client Alert of employers subject to the Fair Labor Standards Act to provide a notice of coverage options to each current employee by October 1, 2013 and to each new employee at the time of hiring, beginning on October 1, 2013.

The June Client Alert continues to provide a good background of many of the requirements of the ACA. Unfortunately, however, many details of the ACA have yet to be finalized. Additional rules should be issued over the next several months. Let us know if you want to discuss the issues in the June or this Client Alert in greater detail.

IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advice contained in this Client Alert is not intended or written to be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter that is contained in this Client Alert.