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National Restaurant Association - Health care law's employer penalties, reporting delayed until 2015

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Health care law's employer penalties, reporting delayed until 2015

In a major victory for employers who have been struggling to understand and figure out how to implement the 2010 health care law, the Treasury Department announced July 2 that it has delayed by a year the law's mandate that requires "large employers" to report to the IRS whether they offered their full-time employees and their dependents health care coverage in 2014.

The National Restaurant Association hailed the Treasury Department's announcement, which also delays employer penalties under the law until 2015.

The reporting requirement was originally due to take effect Jan. 31, 2015, and requires large employers -- defined as those with 50 or more full-time-equivalent employees -- to provide the IRS with details on whether they offered health care coverage to full-time employees and their dependents in 2014.

Instead, the IRS will use 2014 as a year of transition and voluntary reporting, and has pushed mandatory reporting for large employers and insurers to Jan. 31, 2016, to track data on health care coverage employers offered in 2015.

Since the reporting mandate is aimed at giving the IRS a tool to calculate and assess penalties against large employers that failed to offer coverage to full-time employees, the delay in the reporting requirement means large employers will not face penalties under the law for failing to offer health care coverage to their full-time employees in 2014.

"Any employer shared responsibility payments will not apply until 2015," the Treasury Department said.

The Administration said that in months of dialogue with employers and employer groups it has had "heard concerns about the complexity of the requirements and the need for more time to implement them effectively.”

The National Restaurant Association has been one of the top employer groups arguing for transition rules and more flexibility for employers as the law is implemented.

According to the Treasury announcement, the delay will give the federal government more time to figure out how to streamline the reporting requirements and give large employers more time to understand and implement the law.

The agency said the Administration will release formal guidance explaining the transition relief within the next week, and more extensive proposed regulations to explain the employer reporting requirements later this summer. The National Restaurant Association will be providing additional input as further regulations are issued, and will continue to advocate for streamlining the reporting process.
 
"Once these rules have been issued, the Administration will work with employers, insurers, and other reporting entities to strongly encourage them to voluntarily implement this information reporting in 2014, in preparation for the full application of the provisions in 2015. Real-world testing of reporting systems in 2014 will contribute to a smoother transition to full implementation in 2015," according to the Treasury Department's announcement.

Keep up with all the latest news on the health care law at the National Restaurant Association's Health Care Knowledge Center.

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