NAHC’s Efforts to Postpone the Employer Mandate Results in More Progress
February 12, 2014 03:09 PM
The Obama administration recently issued an IRS Final Rule that further delays parts of the Affordable Care Act requiring employers to provide health insurance for their workers. Employers that have fewer than 100 full-time workers will have one extra year - until 2016 - before the employer mandate takes effect. Companies that have fewer than 50 workers are already exempt from the requirement to cover their employees.
In response to the most recent delay to the Employer Mandate, NAHC President Val J. Halamandaris commended the Obama Administration for "listening to the pleas of the American public - including the home care and hospice community - who very much want to see all American’s with access to health care."
Under the rule, employers of more than 100 full-time employees will need to cover 70 percent of their full-time employees in 2015 and 95 percent in 2016 or later or face a penalty. Obama administration officials said the change was a response to complaints about the law’s definition of a full-time worker as one who works 30 hours per week, rather than the conventional definition of a 40-hour work week.
NAHC has long endorsed changing the definition of “full-time worker” from 30 hours a week to 40 hours. Legislation to change that definition is pending in both the House and Senate.
For more on NAHC’s position on the full-time definition, please see NAHC Report, October 16, 2013.
NAHC's leadership led efforts to educate lawmakers on the consequences that the Employer Mandate would have on access to home health and hospice services, which helped to lead to an earlier decision in July to delay enforcement of the Employer Mandate and influenced the additional delay set out in this latest rule.
For more on NAHC’s position on the previous delay to the Employer Mandate, please see NAHC Report, July 3, 2013
Analysis by NAHC staff found that the following changes will apply under the new ruling:
Employers with 50-99 full time employees (including FTEs) in 2014 will not be subject to the health insurance obligations or the penalty for failing to offer qualified health insurance in 2015. The penalty will start in 2016.
Employers with 100 or more full-time employees (including FTEs) in 2014 will need to offer 70% of full-time employees a qualified health insurance or face a penalty. The original requirement was set at 95% of the full-time employees. The offer must extend to 95% beginning in 2016.
Employers with 100 or more full time employees (including FTEs) in 2014 are subject to the mandate in 2015. However, the 2015 penalty calculation is based on accepting the first 80 full-time employees instead of the statutory 30 full-time employee exception. The exception will drop to 30 in 2016 unless there is a further change in the law.
In addition to allowing companies with 50 to 100 workers another year to start providing coverage or face a penalty, the administration is allowing companies that have close to 100 workers some discretion in whether they have to comply. Employers can decide whether they had at least 100 full-time employees in the previous year by picking a period of at least six consecutive months, instead of a full year. If companies lay off workers during the year so that they fall below the 100-worker threshold, they are supposed to sign a form saying that the layoffs were not done to avoid offering health coverage to their workers. Otherwise they will face a fine.
The administration has come under some criticism for not waiving the requirements for individuals as they have for companies. The law says that most people have to buy coverage starting this year. However, the administration is not expected to aggressively enforce the individual mandate to buy insurance in the first year.