Government Postpones ACA Equal Coverage Requirement for Employers

| by Allison Geller

The New York Times reported that the Obamacare requirement that employers give equal coverage to high-level executives and low-level employees has been delayed.

The provision states that employees must be given equal coverage regardless of how much they are compensated.

“Under the Affordable Care Act, for the first time, all group health plans will be prohibited from offering coverage only to their highest-paid employees,” said Erin Donar, a Treasury spokeswoman. “The Departments of Health and Human Services, Labor and the Treasury are working on rules that will implement this requirement.”

But IRS officials were not able to issue regulations to employers in time to enforce the provision.

The ACA states that employer-sponsored health care plans must not favor “highly compensated individuals” when determining employee eligibility and benefits, to keep government tax breaks fair for all employees.

According to the Times, the difficulty has come with defining “highly compensated” and how to measure benefits. The equal coverage provision was supposed to take effect in 2010, six months after President Obama signed the ACA in March of that year.

Additionally, some workers lower on the ladder turn down the insurance offered through their jobs in favor of insurance through the health care exchange, or private insurance. That could be considered a violation of the law on the part of the employer, according to the IRS. Employers will be subject to steep fines if found to be discriminating against lower-paid workers—as much as $100 per day, per employee.

Some business owners oppose the provision, citing the complicated and difficult nature of the regulations.

“Employers should be permitted to provide lower-cost coverage to employees who may not be able to afford the comprehensive coverage being provided to other employee groups,” said Kathryn Wilber, a lawyer with the American Benefits Council.

The IRS has not confirmed the Times’ story, according to Reuters.

Sources: Reuters, New York Times