The Obama Administration announced today that the employer mandates in the Affordable Care Act would not take effect until January of 2015, according to a post on the Department of Treasury’s website.
The delay will undoubtedly come as a relief to the many nonprofit service providers that would have struggled to meet the requirements without serious challenges to their budgets.
From the Treasury statement, written by Assistant Secretary for Tax Policy Mark Mazur:
This is designed to meet two goals. First, it will allow us to consider ways to simplify the new reporting requirements consistent with the law. Second, it will provide time to adapt health coverage and reporting systems while employers are moving toward making health coverage affordable and accessible for their employees.
Earlier this year, the Chronicle of Social Change investigated the extent to which youth services providers were prepared to face of the ACA mandates, which would require any organization with the equivalent of 50 full-time employees to offer affordable health care package to full-time employees or pay significant financial penalties.
Some major providers in the field, such as Eckerd Youth Alternatives and Children’s Villages, reported that they already had a health care package that would fulfill the new ACA obligations.
“We are not anticipating much, if any, impact of ACA on us from an employer perspective,” said Eckerd Chief Personnel Officer Tony Moore, whose organization employs 550 full-time employees and provides child welfare and juvenile justice services in six states. “According to our insurance advisors, our current health insurance plans already meet all requirements of the ACA.”
Other organizations said the financial implications of complying would have been impossible.
Jeff Fleischer, CEO of the Harrisburg, Penn.-based Youth Advocates Program (YAP), said that meeting ACA’s requirements may require the organization to double its health care costs and increase the amount that currently-insured YAP employees pay for their benefits.
The reason may be a situation other direct service organizations run into. YAP has a large number of employees that, for its own purposes, are considered part-time employees. They are integral parts of the model: front-line, paid youth workers in 18 states that engage youth referred from the child welfare and juvenile justice systems.
YAP’s frontline staff often clock more than 30 hours per week, which means for ACA purposes, YAP must provide coverage for them or face financial penalties.
“We support health care reform and I think the nonprofit sector in particular needs some special consideration during implementation so we can be sure that we increase and improve access to healthcare for all Americans, including the most vulnerable youth, without increasing costs for organizations and employees who work in the nonprofit sector,” Fleischer said.
In a separate statement, senior White House advisor Valerie Jarrett said that in the administration’s “ongoing discussions with businesses, we have heard that you need the time to get this right.”
John Kelly is the editor-in-chief of the Chronicle of Social Change