The Department of Treasury announced today that it is delaying the effective date of the tax imposed on employers (with at least 50 full-time employees) who fail to provide health coverage to full-time employees and their child dependents. Under the Affordable Care Act, an employer that does not provide adequate coverage could be subject to an excise tax beginning January 1, 2014. However, the Treasury Department announced that the excise tax will not apply until 2015.
The announcement explains that the delay is necessary because additional guidance is needed for employers to comply with certain reporting requirements. To administer the employer mandate, the Affordable Care Act requires employers to report to the government, among other things, which employees are full-time and whether health coverage is offered to each full-time employee during each month of the year. Today’s announcement acknowledges that employers will need time to implement the reporting requirements after guidance has been issued. The Department is therefore extending the reporting requirements by one year. Because, according to the Treasury Department, reporting is necessary to determine whether an excise tax should be imposed on an employer, the employer mandate must be extended accordingly. The Treasury Department expects to publish proposed rules implementing the reporting requirements this summer.
The announcement states that the extension will not delay the availability of the premium tax credit for individuals who obtain coverage on a health exchange.