As we reported in our July 5, 2013 Client Alert, the government has postponed the implementation of the employer reporting and employer shared responsibility components of the Affordable Care Act (“ACA”) until 2015. As we noted, however, last week’s announcement left many unanswered questions. Some, but not all, of those questions have now been answered in the form of transition relief guidance.
On July 9, 2013, the Internal Revenue Service (“IRS”) released Notice 2013-45 providing additional details, in the form of a short set of questions and answers, on the transition relief for 2014. Specifically, the IRS Notice answers one of the questions we raised last week regarding the possibility that a good faith effort to comply with the shared responsibility rules in 2014 would be required in order to avoid imposition of the penalties. According to the Notice, no employer shared responsibility payments will be assessed for 2014. However, in preparation for the application of the employer mandate beginning in 2015, employers are encouraged to voluntarily comply for 2014 with the information reporting provisions (once the information reporting rules have been issued later this summer) and to maintain or expand health coverage in 2014.
We also now know that the delay in implementation of the employer mandate has no effect on the enforcement of the individual mandate or on the individual’s eligibility for a premium tax credit. Unfortunately, we don’t yet know how this transition relief will affect the special transition rules for non-calendar year plans or the special counting rules for temporary employees that were to apply in 2013. More guidance on these and other issues would be welcome.