Report: Another O-Care provision delayed

The Obama administration is delaying enforcement of a provision of the Affordable Care Act that would have fined employers that provided top executives better heath coverage than is offered to other employees, according to a report from The New York Times.

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According to the paper, the Internal Revenue Service has not yet been able to issue regulations clarifying a portion of the ObamaCare law that prohibits discrimination of eligibility or benefits “in favor of highly compensated individuals.”  

Since the agency has not yet determined how to measure health benefits — or which well-paid employees would be considered “highly compensated” — they plan to hold off on penalties, which are set at $100 per day for each employee negatively impacted.

A similar policy has been in place for employers that serve as their own insurers for more than 30 years, but the new ObamaCare law extends those protections to employers who buy insurance for their workers through a third party.

“The IRS has not announced any new or additional information on this issue,” IRS spokesperson Michelle Eldridge said in a statement. “The New York Times story refers to IRS Notice 2011-1, which was released to the press on December 22, 2010. That Notice stated that the sanctions under Public Health Service Act Section 2716 will not apply until after generally applicable guidance is issued, because the statute requires regulatory detail in order to operate properly.”

“Work on that guidance continues, taking into consideration comments received from the public. Any suggestion that there is a new delay is misleading,” Eldridge said.

“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 Treasury spokesperson Erin Donar in a statement to The Hill. “The Departments of HHS, Labor and the Treasury are working on rules that will implement this requirement of the ACA, taking into account public comments that were previously requested.”

“As we continue this work, employers still have the same incentives they always have had to offer coverage to their employees as part of a competitive compensation package, and will have additional incentives under the Affordable Care Act starting this year and next,” Donar added.

The reported decision to delay enforcement of the provision would be the latest in a string of penalties and deadlines the administration has postponed as it works to implement the sweeping new healthcare law.

Last month, the administration delayed the signup deadline for those who wished to purchase coverage on the ObamaCare marketplace beginning Jan. 1, and said consumers could pay their premiums as late as New Year’s Eve.

The administration has extended a temporary pool for individuals with pre-existing conditions to give them more time to transition to new coverage. It also postponed employer coverage requirements for a year, delayed the federal ObamaCare exchanges for small businesses, and permitted insurance companies to continue offering non-compliant plans to existing customers for an extra year.

Some of the delays came in response to initial technical problems with HealthCare.gov, the federal portal through which the majority of consumers purchase health insurance. The administration insists those technical issues are now resolved for the vast majority of users.

--This report was updated at 4:58 p.m.