White House delays health insurance mandate for medium-sized employers until 2016

The Obama administration announced it would give medium-sized employers an extra year, until 2016, before they must offer health insurance to their full-time workers.  The story was based on a fact sheet released by the US Department of the Treasury, and was first reported by the Washington Post.

According to the fact sheet, firms with at least 100 employees will have to start offering this coverage in 2015, but businesses with between 50 and 99 employees will have a grace period that administration officials are hoping will give cover to Democrats seeking re-election next year and the presidential elections in 2016.

Included in the “fact sheet” is a clause that also allows large employers to avoid a fine by offering coverage to 70 percent of their full-time employees in 2015 and 95 percent starting in 2016. Under an earlier proposal, employers with at least 50 employees would have been required to offer insurance, beginning 2015, to 95 percent of those who work 30 hours or more a week, along with their dependents.

 The regulation finalized by the Treasury Department involves one of the biggest issues surrounding the Affordable Care Act, involving how businesses classify their employees and how much employees will be able to work.  Businesses that fail to offer coverage face a fine of up to $2,000 for each employee that is not covered, though workers are not required to sign up for the benefits.

 The coverage must include a core set of benefits and be affordable — which the law defines as premiums costing no more than 9.5 percent of an employee’s income — and the employer must pay for the equivalent of 60 percent of the cost of coverage for workers but not their dependents.

 Administration officials said that organizations with a large number of volunteer employees — such as firefighters and first responders — would not have to provide coverage, along with those hiring seasonal employers who work six months or less in a given year.

 Teachers will not be considered part-time just because they do not work for three months during the summer, officials added, while the status of adjunct faculty will be calculated on a formula where they would receive credit for 2¼ hours of service per week for each hour they spent teaching or in the classroom.

 It has been widely rumored that the Obama Administration might likely delay the individual mandate for health care coverage until next year, but this was not addressed in the Treasury Department fact sheet.

Source:  Washington Post at http://www.washingtonpost.com/national/health-science/white-house-delays-health-insurance-mandate-for-medium-sized-employers-until-2016/2014/02/10/ade6b344-9279-11e3-84e1-27626c5ef5fb_story.html.

US Department of the Treasury fact sheet at http://www.washingtonpost.com/blogs/wonkblog/files/2014/02/Fact-Sheet-021014.pdf.