Obama Administration Releases Employer Mandate Draft Guidance

The Obama administration on Thursday issued draft guidance on the Affordable Care Act's employer mandate that aims to ease the reporting requirements for employers and insurers when they inform the federal government about workers' health coverage, Reuters reports (Dixon, Reuters, 9/5).

Under the employer mandate, employers with at least 50 full-time workers must provide affordable health coverage or face a $2,000 fine per worker after the first 30 employees. In a pair of posts published on the White House and Treasury Department blogs on July 2, officials said the mandate will be delayed for one year -- until 2015 -- to address employers' and business groups' concerns and to give them more time to comply with the reporting requirements (California Healthline, 8/20). The delay does not affect the individual mandate, which still is expected to be implemented as scheduled on Jan. 1, 2014 (Reuters, 9/5).

More Details on Draft Guidance

Administration officials said the draft regulation on the employer mandate -- developed by the Internal Revenue Service -- was created with the intent to streamline and simplify the reporting requirements. Officials also noted that 95% of businesses that would have to comply with the regulation already meet the affordable health coverage rule (Howell, Washington Times, 9/5).

In addition to streamlining the reporting requirements, the draft guidance would:

  • Limit reporting for self-insured employers that offer no-cost coverage; and
  • Allow businesses to report their health benefit offers in W-2 tax forms, instead of in the currently mandated statements about coverage offers.

Mark Mazur -- assistant secretary for tax policy -- in a Treasury statement said, "We will continue to consider ways, consistent with the law, to simplify the new information reporting process and bring out a smooth implementation of those rules." The department noted that "[r]eal-world testing of reporting systems in 2014 will contribute to a smoother transition to full implementation in 2015" when the employer mandate is scheduled to take effect.

According to The Hill's "RegWatch," the IRS is urging applicable employers and insurers to begin following the draft guidance on a voluntary basis starting in 2014. Meanwhile, interested parties and the public can submit comments on the proposed rule during the next 90 days, before the finalized regulation is issued (Goad, "RegWatch," The Hill, 9/5).

Reaction to Draft Guidance

Business and employer groups commended the administration's efforts to address their concerns about the reporting requirements and streamline the process, but some said the draft rule does not go far enough and might require time to sort through the technicalities, AP/U-T San Diego reports (Alonso-Zaldivar, AP/U-T San Diego, 9/5).

Neil Trautwein -- vice president and employee benefits policy counsel at the National Retail Federation, which represents large retail employers like Wal-Mart and Macy's -- said, "One thing retailers and other employers hate more than anything else is sending the same information to different agencies" (Reuters, 9/5). Retailers "are not interested in being overly burdened by bureaucratic red tape or time-wasting, duplicative reporting requirements," he added (AP/U-T San Diego, 9/5).

According to Reuters, the NRF is calling on the IRS and HHS to work together to further simplify the reporting regulations (Reuters, 9/5).


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