On July 2, 2013, the Obama Administration issued a statement announcing that the Affordable Care Act's (ACA's) employer mandate, under which certain employers may be subject to penalties for failing to offer health coverage, or for offering coverage that is unaffordable or does not provide minimum value, would be delayed until 2015. The mandate, sometimes referred to as the "play or pay" requirement, had been scheduled to take effect on January 1, 2014 (see Practice Note, Employer Mandate under the ACA: Overview).

The Administration explained that the delay was related to its decision, also announced in the statement, to postpone the ACA's mandatory employer and insurer reporting requirements until 2015. The Administration stated that it expects to publish proposed regulations implementing these reporting requirements, contained in Internal Revenue Code (IRC) Sections 6055 and 6056, during the summer of 2013. Compliance with the reporting requirements would only be voluntary during 2014, however.

Noting business concerns about the complexity of the new reporting requirements and the need for additional time to implement them effectively, the Administration stated that the delay would provide an opportunity to:

Despite the delay, the Administration stated that it encouraged employers to maintain or expand health coverage during 2014, and noted that the postponement of the mandate and reporting requirements does not affect any other ACA provisions, including employees' access to the premium tax credits.

Formal guidance addressing these changes is expected within the next week.

The IRS' announcement will come as welcome relief to those employers subject to the mandate, many of whom (through business groups and similar outlets) have criticized the difficulty under existing employer mandate guidance of determining the full-time employee status of various categories of individuals. Regarding reporting, it had become increasingly apparent in recent months that guidance addressing the Sections 6055 and 6056 reporting rules would not be issued in time to allow for timely implementation. Notably, the administration's announcement does not address the ACA's health insurance exchanges, which are presently scheduled to begin operation in 2014 (see Practice Note, The Health Insurance Exchange and Related Requirements under the ACA).