At the beginning of July, we reported the U.S. Treasury’s announcement that the penalty for failure to provide health coverage according to the rules of the Patient Protection and Affordable Care Act would be delayed. The IRS has now made that delay official.
The original effective date for information reporting rules under Secs. 6055 and 6056, as well as for the shared responsibility penalty under Sec. 4980H, was 2014. Notice 2013-45 postpones the effective date to 2015, in order to give employers, insurers, and other providers time to adapt their systems.
The Journal of Accountancy posted an update on their website describing the details of the change.
Because of the need to delay the information reporting rules, the penalty for non-compliance also needed to be delayed since there would be no practical way to determine who owed the penalty.
The notice also made clear that the postponement wouldn’t affect the availability of the premium tax credit under Sec. 36B, which assists low- and moderate-income individuals who aren’t eligible for affordable employer coverage that provides minimum value and who enroll in a qualified health plan through a health insurance exchange. The delay also doesn’t affect the penalty that applies to individuals who fail to obtain minimum essential coverage. That penalty will take effect, as scheduled, in 2014.
Although the effective date for the employer rules has been delayed, the Treasury is encouraging voluntary compliance in 2014 so they can more fully prepare for and anticipate problems that may arise in 2015.