On Tuesday, the U.S. Treasury Department announced that it was delaying the insurance mandate on employers by one year. (In case you did not know this, the IRS is in charge of enforcement of the Affordable Care Act requiring that we all buy or provide health insurance.)
What does this mean? Essentially, businesses were asking the Assistant Secretary for Tax Policy to explain what they are supposed to do (i.e. how to report compliance or pay fines). No one really knew and the government could not provide a good answer. Lots of businesses complained. So President Obama and the IRS gave themselves an extra year to figure it out. They marketed it as “listening” to the feedback of American businesses. (I wish President Obama would have listened before passing this unworkable monstrosity, but I digress.)
But let’s get down to brass tacks. How does this affect you and your business?
- If your business has more than 50 employees, it means you get another year of not knowing what to do, but at least you do not have to do anything right now. The compliance reporting and/or $2000 fine for each uninsured employee has been abated until July 1, 2014.
- Businesses hovering around 50 employees are likely to continue to job freeze and allow for natural attrition rates to keep them below 50, or to hire only part time employees.
- Businesses with less than 50 employees (the vast majority of businesses in America) will still have to face the uncertainty in the health insurance marketplace, which has generally resulted in higher premiums for employers of all sizes. Expect premiums to go up again in 2014.
- Businesses with less than 50 employees will still face additional burdens from the Affordable Care Act, which begin on January 1, 2014. (Stay tuned to this blog — we will be providing more information and compliance training soon.)
- Payroll taxes (including Medicare) have already increased and the state-run insurance exchanges for individuals buying their own insurance begin on January 1, 2014, which will (of course) need to be funded.
- The exchanges have already resulted in (predictably) higher premiums for individuals, so the job market should see some pressure by consultants and employees negotiating for permanent, full-time positions with insurance because their expenses have just gone up.
Obamacare continues to be a nightmare of economic uncertainty for business owners, employers and taxpayers. Keep that in mind, next time you vote.