The U.S. Department of Treasury announced that the Obama administration is extending the mandatory employer and insurer reporting requirements — also referred to as the “play or pay requirement” — of the Patient Protection and Affordable Care Act until 2015.
The one-year extension is the result of ongoing conversations the administration has had with businesses, which reflected concerns regarding the complexity of the requirements and the need for more time to implement them effectively. It will only affect large employers with 50 or more employees and does not change the timeline for implementation of other aspects of the ACA.
“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,” reads a Department of Treasury blog post. “We have listened to your feedback. And we are taking action.”
According to the Department of Treasury, the decision is expected to allow for greater simplification in the reporting requirements and provides time to adapt health coverage and reporting systems while employers are moving toward making health coverage affordable and accessible for their employees.
The Department of Treasury plans to provide formal guidance describing this transition sometime next week.
Mary Bauman, an attorney for Miller Johnson in Grand Rapids, said that she did not see this decision coming and is surprised that the administration has decided to extend the timeframe for implementing the play or pay requirements. She added that it seems to be a recognition that the new requirements are complicated and time consuming for employers and that more time is needed for proper implementation.
Bauman also noted that while this might be good news for some employers that may not be as prepared for the new reporting requirements, for others the decision might result in more complications.
“We’ve had a lot of employers very busy this year reviewing their plan eligibility rules and plan design and premium requirements and looking at changes that they may need to make next year, so they’ve spent a lot of energy on that and now, of course, that has been delayed.”
Bauman pointed out that some employers may have already negotiated with unions and now they might have to go back to the negotiating table.
The decision is very limited in scope and employers still need to plan to implement other aspects of the ACA according to the original timeline, such as the patient-centered outcomes research trust fee, the temporary reinsurance program fee, the distribution of the notice of exchange availability, the cap on maximum out-of-pocket amounts and other provisions.
According to a statement issued by Terry Gardiner, vice president of policy and strategy for the national small business advocacy organization Small Business Majority, a very small number of businesses are actually affected by the delay.
“Ninety-six percent of businesses in this country have fewer than 50 employees,” Gardiner said. “For these employers nothing changes because they were already exempt from the employer responsibility requirements.
“For larger businesses with more than 50 employees, 96 percent already offer insurance and we believe will continue to for business reasons. Only the 4 percent of larger employers that do not offer health insurance will be impacted by the delay in the penalty.”