Implementation Delayed for the Employers Mandate Provisions of the Affordable Care Act

The IRS and the Obama Administration have officially delayed implementation of the employer mandate provisions of the Patient Protection and Affordable Care Act (“ACA”) to January 1, 2015. Meanwhile, Congress continues to grapple with the remaining prospective provisions of the ACA, such as the individual mandate, with new legislation being proposed at a rapid pace.

Employer Mandate

The “employer mandate” or “employer shared responsibility provision” is the portion of the ACA that requires “employers who employed at least 50 full-time employees, including full-time equivalent employees, on business days during the preceding calendar year” to offer affordable and adequate health insurance to all full time employees. The employer mandate was set to go into effect January 1, 2014, with applicable employers who failed to meet the employer mandate requirements subject to monthly penalties as of the implementation date.

Employer Mandate Delay

The implementation date for the ACA’s employer mandate has been officially delayed a year – to January 1, 2015 – with the delay reigniting the debate over whether the ACA can be an effective tool for allowing all Americans access to affordable health insurance. Although limited guidance is available, the main impact of the revised January 1, 2015 implementation date for the employer mandate provision is that large employers will not face penalties for failing to provide adequate and affordable health insurance to their full-time employees in 2014. Further IRS guidance will be required in order to determine which safe harbors, previously applicable to 2013 employment, will be available to employers with respect to 2014.

Future of the ACA

Although the House has voted through various bills designed to hinder or eliminate the ACA, none are anticipated to be passed by the Senate. As the New York Times noted on August 2nd, “[i]n its last action before a five-week summer recess, the House took another jab at President Obama’s health care law on Friday, voting to prohibit the Internal Revenue Service from enforcing or carrying out any provision of the law. The bill, approved by a vote of 232 to 185, now goes to the Senate, where it has virtually no chance of approval. President Obama stated he would veto the measure if it got to him.” Regardless of whether Congress and President Obama codify any changes to the ACA, the IRS and other implementing agencies still face many hurdles to full ACA implementation. The health insurance exchanges or marketplaces, places where individuals and small businesses will be able to shop for federal and state approved affordable health insurance, are set to open October 1, 2013. Any delay in the opening of the exchanges would almost certainly cause a delay in the implementation of the individual mandate, a mandate requiring most Americans to have health insurance or pay a penalty for noncompliance.


The ACA, and how it affects employers, will continue to evolve as more provisions are implemented or delayed. We will send out additional Legal Alerts as this area of law develops. Should you have any questions about the delay in ACA implementation, please do not hesitate to contact Kate E. Flewelling, Janis L. Adams, or any member of Smith Haughey Rice & Roegge’s Labor and Employment practice group.