The delay of ACA employer penalties, along with some of the law’s reporting requirements, was announced July 2 in the government blog, Treasury Notes. A week later the Internal Revenue Service (IRS) issued a formal notice of transition relief.
Specifically, the delay affects annual reporting under sections 6055 and 6056 of the Internal Revenue code by large employers and other entities required to file certain information on employees and their health coverage.
The delay gives the administration time to “simplify” reporting and “adapt health coverage and reporting systems,” said Mark Mazur, assistant secretary for tax policy, who wrote the Treasury Department’s announcement.


Penalties, or “employer-shared responsibility payments” in ACA parlance, were also delayed. Under the ACA, penalties are triggered when large employers fail to offer “affordable” and “minimum value” coverage to full-time workers and one or more of their employees applies to a Health Insurance Exchange and is deemed eligible for subsidized coverage.
Since penalties are linked to the information provided by the delayed reports, it would be “impractical” to try to assess whether employers owed penalties in 2015 and in what amount, Mazur said. He urged businesses to voluntarily comply with both the reporting and health coverage requirements in 2014, even though they won’t pay penalties for failing to do so.
Federal officials are making it clear that the delay is not a “pass to drop coverage,” says Ford Harrison's Tiffany Downs. While some employers are putting a hold on coverage expansions to avoid the cost, others are moving forward with ACA compliance so that if they experience “hiccups,” they “have a year to work it out before the penalty kicks in,” she says.
While the impact of the delays on employer costs and decision making is significant, a multitude of other requirements remain on schedule and can’t be overlooked, experts say.
“Employers should keep preparing for the implementation of other requirements,” says CLA’s Nicole Fallon.

Notifications Due

Among the most immediate measures is the notification that all businesses must provide to every employee by Oct. 1, 2013, and to all new hires after that date. The notices must:
  • Indicate whether or not employees will be offered coverage;
  • Provide contact information for the Health Insurance Exchange;
  • Describe services offered through the Health Insurance Exchange and the possibility that an employee may be eligible for insurance subsidies; and
  • Disclose the risk of losing employer contributions to health benefits when employees who are offered affordable, minimum value coverage through the workplace purchase it instead through the Exchange.
The Department of Labor has posted two model notices on its website, at One form is for businesses that offer coverage to full-time workers and one for those that do not.

Employers may use the model forms or create their own, as long as they include the requisite information, says Greenberg Traurig's Nancy Taylor. Either way, this is “an opportunity to educate staff about the benefits you’re offering or the benefits of the exchange,” she says.