“Play-or-pay” delay: what employers need to know

Evan Rodd, PayScale

Following a recent announcement by the Treasury Department, employers have been provided another year (until 2015) before penalties under the employer “play-or-pay” mandate are addressed. Additionally, the mandatory employer and insurer reporting requirements have also been delayed. Under the mandate, organizations with 50 or more full-time (those that work 30 or more hours a week) employees are required to minimum essential coverage.

Why the delay
Many employers have worried specifically about the reporting requirements (and possible penalties) under the mandate in the Patient Protection and Affordable Care Act (PPACA), stating that proper implementation by the original deadline of 2014 would have been difficult due to the complex requests.

According to the Obama Administration, the delay will, “allow us to consider ways to simplify the new reporting requirements,” and “provide time to adapt health coverage and reporting systems while employers are moving toward making health coverage affordable and accessible for employees.” While this may come as a relief to many businesses, there are still ways to prepare for the inevitable mandate.

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While it is nice to have another year to come into compliance with the employer mandate (or pay penalties if coverage is not offered), it is recommended that you start to prepare as soon as possible. The Obama administration will continue to refine the reform rules as concerns are expressed regarding the cost of this transition.

Decision time: pay or play?
Now is the time decide weather you want to play, or pay. Also, discuss with company leaders the possible affect on employee retention. The extra year will give your organization more than enough time to make needed changes to your health care benefit programs to meet the law’s requirements. Industries with large amounts of part-time employees, or employees with inconsistent schedules should take special notice. Staffing will be part of the decision-making process, as well as adjustments to benefits. Employers are encouraged to take this time to hire for business needs as well as possible mandate penalties. The extra year will give you more time to assure employee retention when play-or-pay goes into effect. It is also wise to use the extra time to update your reporting systems.

If you are able, offer benefits now, rather than later. As 2015 approaches, you may have less time to negotiate deals with providers. The sooner you secure adequate coverage, the sooner you can shift attention back to business needs, and focus less on ensuing penalties.

How will Play-or-Pay impact your staffing needs and benefits programs? If you’re an organization with 50 or more employees, how are you going to use this extra year to prepare?

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1 Comment on "“Play-or-pay” delay: what employers need to know"

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Bettye Bess

we will like know more information on heath reform and to create leader ship position pay scales for our transportation service company