On July 9, 2013, the Internal Revenue Service (“IRS”) released a formal notice indicating that the employer responsibility penalty provisions and some of the new reporting requirements imposed by the Patient Protection and Affordable Care Act (“PPACA”) would be delayed until 2015. The delays were originally announced through a blog posted on the website of the U.S Department of Treasury (“Treasury”) on July 2, 2013. Some initial observations on the impact of the delay can be found here.

The IRS issued notice does not provide substantial new information; however, the notice does emphasize that all of the employer penalty provisions will be applied in 2015.  It is uncertain at this time whether there will be further changes and delays implemented. Nevertheless, employers are left with no choice but to take the federal government at its word and to prepare for the implementation of the penalty provisions in 2015.

In preparation for the brunt of the employer penalty provisions, which are now scheduled to go into effect in 2015, employers may want to take certain steps to avoid the penalty provisions later this year. When the employer penalty provisions were scheduled to be introduced in 2014, Treasury issued proposed regulations that would have allowed employers to measure their employees’ hours for six months in 2013; determine whether their employees were part-time or full-time employees—within the definitions provided by the PPACA; and then lock-in the status for each full-time and part-time employee for 2014.  The six month measurement period allowed employers to hold off on reducing the hours of part-time employees if doing so was necessary to bring employee hours into line with the part-time employee definition provided by the PPACA. If a similar truncated measurement period is not permitted by Treasury for 2015, it may be necessary to start tracking employee hours no later than December 1, 2013.

All of the observations made in this earlier blog post remain unchanged by the publication of the notice.  The federal government, however, will certainly come forward with further guidance and, perhaps, additional changes. It remains critical that employers keep abreast of the constantly evolving law and the many changes that the PPACA is making to the ways in which health insurance is provided in the United States.

The original notice can be found here.