AUG 2013 – Penalties Delayed For Small Businesses

The requirement that businesses provide their workers with health insurance or face fines will be delayed by one year.

The delay came after business owners expressed concerns about the complexity of the law’s reporting requirements, the Internal Revenue Department reported. Under the Affordable Care Act, businesses employing 50 or more full-time workers that don’t provide them health insurance will be penalized.

Business groups had argued for months that the law created an administrative burden for businesses as they tried to update technology and plan to offer health coverage to their employees without knowing how much the coverage would cost.

The delay gives the IRS more time to simplify reporting requirements, as well as for businesses to get up to speed with reporting systems. The government still encourages businesses to voluntarily begin reporting in 2014 so they will be ready for 2015.

Supporters of the employer mandate note that most firms already provide health insurance to full time workers, and downplay the effect the requirement would have on small businesses, citing figures showing the vast majority of small businesses employ fewer than 50 workers.

Opponents claim the employer mandate is a potential job killer, saying businesses near the 50-worker cutoff will be unlikely to ramp up hiring if it means they’re required to provide employ The delay gives the IRS more time to simplify reporting requirements, as well as for businesses to get up to speed with reporting systems. The government still encourages businesses to voluntarily begin reporting in 2014 so they will be ready for 2015.

The new delay will not affect other aspects of the health law, including the establishment of exchanges in states for low-income Americans to obtain health insurance.  It also does not change the individual mandate, which requires most Americans to purchase insurance.

 

 

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