PPACA “Play or Pay” Provision Delayed One Year

07/03/2013

The Obama Administration made a sudden announcement last night that a key provision of PPACA, the Employer Shared-Responsibility mandate, also known as the “Play or Pay” mandate, scheduled to become effective on January 1, 2014, will be delayed for one year and not take effect until January 1, 2015.

According to a blog posting last night, from the U.S. Department of the Treasury, “This (delay) is designed to meet two goals. First, it will allow us to consider ways to simplify the new reporting requirements consistent with the law. Second, it will provide time to adapt health coverage and reporting systems while employers are moving toward making health coverage affordable and accessible for their employees.”

Sources cited say that the main reason behind the delay is to allow time for the Obama Administration to simplify and clarify the reporting requirements outlined in PPACA and, in turn, give employers, insurers and third parties time to prepare for these requirements. A delay in the reporting will require a delay in the Play or Pay penalties given that one cannot realistically exist without the other. The blog states, “We recognize that this transition relief will make it impractical to determine which employers owe shared-responsibility payments for 2014, we are extending this transition relief to the employer shared-responsibility payments. These payments will not apply for 2014. Any employer shared-responsibility payments will not apply until 2015.”

The Health Reform Advisory Team (HRAT) at WGA is evaluating all of the ramifications surrounding this unexpected development. We will keep you updated as new details become available.