On July 2, the Obama administration announced that it would delay for one year the reporting requirements of the Shared Employer Responsibility ("play or pay") provision of the Affordable Care Act (ACA) and along with it any penalties and assessments that would fall due under the provision.
This delay saved businesses with 50 or more employees that did not offer health insurance the potential of monetary fines for non-compliance, roughly $2,000 per employee above 30 on the payroll. (Another provision would sock employers $3,000 per employee who was offered insurance that was deemed not "affordable and adequate").
Though the monetary and record-keeping savings of the delay are welcome news for affected employers, it should be noted that the assessments are pegged to inflation in health insurance premiums. Thus, for example, if premiums rise on average 3.5 percent in the coming year, the $2,000 fine will rise to $2,070 and the $3,000 fine to $3,105 in 2015, when the Shared Employer Responsibility provision finally kicks in.
The Health and Human Services (HHS) secretary, currently Kathleen Sibelius, must announce the rate increase for 2015 by Oct. 14, 2014.