Healthcare.jpgThis blog post was authored by Heather DeBlanc

As LCW previously reported, the Department of Treasury recently announced that it will delay enforcement of the reporting and employer shared responsibility provision of the Affordable Care Act (“ACA”) until 2015.  On July 9, 2013, the IRS published Notice 2013-45, officially confirming the delay.  (See

Effective Date of Employer Shared Responsibility Officially Delayed to 2015

The Notice 2013-45 confirms that the IRS will not impose the employer shared responsibility payments (aka “penalties”) on employers that fail to offer affordable, minimum value coverage to full-time employees during 2014.  The guidance emphasizes that, “Real-world testing of reporting systems and plan designs through voluntary compliance for 2014 will contribute to a smoother transition to full implementation for 2015.”  The delay has no impact on the effective dates or application of all other Affordable Care Act provisions.  We expect further guidance on employer information reporting provisions to be published this summer. 

Most Employers Still Need to Measure Hours Beginning in 2013

To ease the transition to 2014, the IRS previously allowed employers choosing to adopt the Look Back Measurement Method Safe Harbor to adopt a 6-12 month “transitional” measurement period and a 12 month stability period for 2014.  The newly released guidance makes no mention of a transitional measurement period.  It appears that transitional measurement periods will not be allowed in 2015, presumably because the longer timeframe for employers to come into compliance makes a transitional period unnecessary.  Therefore, employers who wish to adopt a 12 month stability period under the safe harbor may need to start tracking employee hours during 2013.  The exact date an employer should start measuring will depend on the length of the administrative period selected and whether the plan is a calendar year or fiscal year plan.  (In California, fully insured group health plans must offer coverage effective 60 days after an employee’s start date, and therefore administrative periods under the safe harbor may not exceed 60 days.) 

Next Steps for Employers Seeking to Comply with ACA

LCW recommends that employers proceed with their plans and implementation to comply with ACA.  By moving forward with their planning and implementation, employers can address various timing and workforce planning issues that may arise in adopting the Look Back Measurement Safe Harbor without the risk of penalties before 2015. The IRS delay provides welcome breathing room for employers to work through compliance issues, but they must still prepare now for full implementation of ACA in 2015.