U.S. Treasury Department Delays Reform Mandated Penalties for “Play or Pay”

The U.S. Treasury Department announced on July 2, 2013 that enforcement of the employer “play or pay” mandated penalties under Healthcare Reform will be delayed until January 1, 2015. The “play or pay” mandate requires large employers (companies with 50 or more full-time employee and full-time equivalents) to offer a minimum value medical coverage plan to substantially all of their fulltime employees, and dependents, or be subject to an annual penalty tax of up to $2,000.00 per full-time employee. This postponement means that employers can delay offering a minimum value medical coverage plan to their employees until at least January 1, 2015. Additionally, this decision postpones a requirement under the healthcare reform law that employers report on health coverage they provide to their employees.

It must be noted that while the “play or pay” mandated penalties and the related reporting requirements have been delayed, all other aspects of Healthcare Reform will take effect as originally planned. Specifically in the U.S. Treasury Department announcement, it was noted that the new tax credit to help individuals buy health insurance if their employers do not offer such a benefit will still go into effect in 2014. Additionally states, like California, have announced that the “play or pay” delay will not affect the rollout of the new state-run or federal-run insurance plans to begin on October 1, 2013.