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PPACA Delay Does Not Signal End of Affordable Care Act, John McGowan Says

News / July 8, 2013

The Obama Administration has decided to delay from 2014 to 2015 an Affordable Care Act rule requiring larger employers to provide health benefits. In an announcement posted on its website, the U.S. Department of the Treasury said it would use the additional year to “simplify the new reporting requirements” surrounding the types of coverage offered by larger employers.

Why the delay? In an email provided to Managed Healthcare Executive (“Mandate delay hikes subsidy costs”), Employee Benefits Partner John McGowan indicated that nothing in the U.S. Treasury’s statement suggests the administration is pulling back from the individual mandate or from the implementation of public exchanges. “Given that the Treasury Department alone made the announcement, it does not look like an attempt to float an idea, or signal the start of a general retreat from implementing the Affordable Care Act,” McGowan said.

“It also highlights the challenges the IRS faces, as the agency charged with assessing, collecting — and enforcing — the tax penalties that non-compliant employers will face under the Affordable Care Act," McGowan told Life Health Pro (“Does the PPACA delay signal the end of Obamacare? Not really”). "A fair reading of the applicable sections implies that the IRS recognizes that it can’t or won’t be able to collect the information it needs, and that it won’t have the systems in place to make sense of any information it does obtain, to enforce the new tax penalties.”

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