Obama administration delays business penalties under Affordable Care Act

140px-US-DeptOfTheTreasury-Seal.svgThe U.S. Treasury announced on Tuesday that the Obama administration would delay penalties for businesses that do not provide healthcare for workers under the Affordable Care Act.

“The Administration is announcing that it will provide an additional year before the ACA mandatory employer and insurer reporting requirements begin,” Mark J. Mazur, the assistant secretary for tax policy at the Treasury, said, according to The City Wire. “This is designed to meet two goals. First, it will allow us to consider ways to simplify the new reporting requirements consistent with the law. Second, it will provide time to adapt health coverage and reporting systems while employers are moving toward making health coverage affordable and accessible for their employees.”

Beginning Jan. 1, businesses with 50 or more full-time equivalent workers were expected to provide healthcare plans for workers and to report the information to the government.

If information was not provided, the business would face strict fines and penalties. For businesses with more than 50 employees, the penalty would have been $2,000 per uninsured employee after the first 30 employees. The Congressional Budget Office estimated that the penalties would bring in $4 billion next year, USA Today reports.

Lawmakers and business groups have expressed concern over the deadline, calling for an extension to allow for proper implementation of the new requirements.

“We have heard concerns about the complexity of the requirements and the need for more time to implement them effectively,” Mazur said, according to USA Today. “We recognize that the vast majority of businesses that will need to do this reporting already provide health insurance to their workers, and we want to make sure it is easy for others to do so.”

The announcement came just a few days after Rep. Luke Messer (R-Ind.) introduced legislation that would raise the employer mandate tax threshold for a “large employer” from 50 full-time equivalent employees to 100.

Co-sponsored by Rep. Todd Young (R-Ind.), the legislation has been endorsed by a number of groups, including the U.S. Chamber of Commerce, National Retail Federation, International Franchise Association and Retail Industry Leaders Association.

“Expanding the definition of a ‘large employer’ to 100 employees would protect a wider range of small businesses and retailers and allow them to grow and hire more workers,” the NRF said in a statement on Tuesday. “An employer should never have to choose between hiring an additional employee or paying a penalty.”

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