Mid-size businesses with 50 to 99 employees will have another year – until 2016 – to provide health insurance to their full-time workers, the second delay associated with the employer mandate by the Obama Administration.
The IRS rule released Monday about shared responsibility for employers regarding health coverage gives medium-size employers an extra year to comply with the Affordable Care Act's coverage and reporting requirements. The rule will be officially published Wednesday in the Federal Register.
Large employers with 100 or more workers also were given some leeway. They may phase in the percentage of full-time employees who are offered coverage to 70 percent in 2015 and to 95 percent of their workers in 2016 and beyond. Previously, large businesses had to comply with the 95 percent mark in 2015.
Full-time employment is still based on at least 30 hours of service per week.
The majority of large employers already provide insurance, the Treasury Department said in a media release explaining the rule.
Small businesses with fewer than 50 employees remain exempt from the health coverage mandate.
The rule makes what Treasury described as "commonsense improvements" in response to comments on the proposed regulations issued in December 2012.
"While about 96 percent of employers are not subject to the employer responsibility provision, for those employers that are, we will continue to make the compliance process simpler and easier to navigate," said Mark Mazur, Treasury assistant secretary for tax policy, in the release.
Next, Treasury and the IRS will release final rules "shortly" that aim to simplify employer information reporting.
Response to the changes was mixed as has been the pattern for the healthcare law. The National Retail Federation supported the administration's flexibility in working with retailers and other employers.
"Continued simplicity, streamlining and clarification of the Affordable Care Act are in the best interest of employers and employees and the administration and Congress," said Neil Trautwein, vice president and employee benefits policy counsel for the National Retail Federation, in a statement.
The National Association of Manufacturers said in a release that the revisions lead to more uncertainty. Others have noted that the delay was designed to offer some cover for Democratic candidates in the upcoming mid-term elections.