On Tuesday, the U.S. Treasury Department announced a one-year delay in a key provision of President Barack Obama’s sweeping health care law, the Affordable Care Act. It postponed the provision that required businesses with more than 50 employees to provide their workers with health insurance or face fines. The Treasury Department explained in its blog that the government needs time to simplify reporting requirements, and businesses need breathing room to adapt to the changes.
According to the Treasury Department’s blog, what the delay does not impact is the individual mandate to buy insurance, which is cited as the most controversial part of the law, or the health exchanges through which coverage can be purchased. Mark J. Mazur, assistant secretary for tax policy, said that the extra year before the requirement goes into effect will allow the government time to assess ways to simplify the reporting process for businesses. Penalties for firms not providing health coverage to employees will now begin in 2015 – after next year’s congressional elections.
The practical impact on the Treasury Department’s decision: many businesses can push back providing employee health insurance a bit longer.