September13Report - page 10

September 2013 CBA REPORT
feature article
sign of our times: PPACA has
been changed through a blog
On July 2, 2013, the Assistant
Secretary for Tax Policy at the U.S. De-
partment of the Treasury indicated in a
blog post that certain aspects of PPACA
would be delayed for one year.
then followed up with Notice 2013-45 to
confirm the scope of the delay.
The Treasury Department had
received requests to provide transition
relief from certain reporting require-
ments that would otherwise become
effective in 2014. Because the Treasury
Department is still working on ways to
simplify those reporting requirements,
and because stakeholders had requested
time to adapt their reporting systems, the
Treasury Department decided to delay
implementation of the reporting require-
ments until 2015.
But PPACA is a very complicated web
of interconnected provisions. Without
the required reporting, it would be im-
practical for the IRS to determine which
employers owed the shared responsibility
(or “pay or play”) penalties.
Accordingly, the delay affects three
aspects of PPACA: the employer pay
or play penalties, annual information
reporting required under new Internal
Revenue Code Section 6056 and annual
information reporting required under
new Internal Revenue Code Section 6055.
Pay or Play Penalties
Under the pay or play rules, an ap-
plicable large employer (generally, an
employer with 50 or more employees)
Ed. Note: This is the seventh in a series of articles that will be published in the CBA Report over the next several
months related to the 2014 implementation of the Patient Protection and Affordable Care Act (“PPACA”). This
information was submitted for publication on July 31, 2013. It does not reflect guidance issued on or after this date.
By Kimberly Wilcoxon
will be subject to a penalty if two condi-
tions are met. First, the employer must
fail to offer a sufficient level of affordable
coverage to all of its full-time employees.
Second, at least one of the employer’s
full-time employees must receive
federally-subsidized insurance through a
state marketplace.
As a result of the delay, the pay or
play penalties will first become effective
for the 2015 calendar year. Employers
will not be subject to penalties for failing
to offer sufficient affordable coverage in
6056 Reporting
Employers who are subject to the pay
or play rules will be required to file an-
nual reports with the IRS. These reports
must identify the employer’s full-time
employees, describe the health care cov-
erage offered to full-time employees, and
indicate the time period during which
each full-time employee was covered.
In addition, the employer must provide
each full-time employee with a statement
confirming the information about the
employee that was included in the report.
As a result of the delay, these annual
reports and employee statements will
first be required for 2015.
6055 Reporting
Beginning in 2014, most individu-
als will be subject to a federal income
tax penalty if they are not enrolled in
minimum essential coverage. Minimum
essential coverage includes individual
insurance policies, employer-provided
health plans, Medicare, Medicaid, the
Children’s Health Insurance Program,
TRICARE and certain other health
Providers of health coverage (includ-
ing insurance companies and employers
sponsoring self-insured health plans) will
be required to file annual reports to iden-
tify the persons to whom they provide
minimum essential coverage.
As a result of the delay, the reporting
will first be required for 2015.
Unaffected Provisions
Unless other guidance provides for
additional delays, all other provisions
of PPACA will remain in effect and be
enforced. For example:
• Individuals will still be subject to
penalties if they do not maintain
minimum essential coverage begin-
ning in 2014, and eligible individuals
will still be able to obtain federally-
subsidized health coverage through
the state marketplaces.
• Health plans and insurers will
still be prohibited from imposing
pre-existing condition limitations
beginning in 2014.
• Employers will still be required to
provide notices of state marketplaces
by October 1, 2013. They will also
still be required to comply with cer-
tain plan design requirements that
first take effect in 2014.
Impact of the Delay
This delay may be welcome relief for
employers who were struggling to make
You Say There’s a Delay?
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