The Department of the Treasury announced today that it will delay implementation of the employer mandate in the Affordable Care Act:

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. . . .

Once these rules have been issued, the Administration will work with employers, insurers, and other reporting entities to strongly encourage them to voluntarily implement this information reporting in 2014, in preparation for the full application of the provisions in 2015.  Real-world testing of reporting systems in 2014 will contribute to a smoother transition to full implementation in 2015.

We recognize that this transition relief will make it impractical to determine which employers owe shared responsibility payments (under section 4980H) for 2014.  Accordingly, we are extending this transition relief to the employer shared responsibility payments.  These payments will not apply for 2014.  Any employer shared responsibility payments will not apply until 2015.

The employer shared responsibility payment is the penalty that applies to employers with 50 or more employees:

. . . if these employers do not offer affordable health coverage that provides a minimum level of coverage to their full-time employees, they may be subject to an Employer Shared Responsibility payment if at least one of their full-time employees receives a premium tax credit for purchasing individual coverage on one of the new Affordable Insurance Exchanges.

As Sarah Kliff of the Washington Post notes about the penalty,

That policy had raised concerns about companies downsizing their workforce or cutting workers’ hours in order to dodge the new mandate.

In delaying the enforcement of that rule, the White House sidesteps those challenges for one year. It is also the second significant interruption for the Affordable Care Act, following a one-year delay on key functions of the small business insurance marketplaces.

Together, the moves could draw criticism that the administration will not be able to put into effect its signature legislative accomplishment on schedule.

In the meantime, of course, Washington has accepted the expansion of Medicaid under the ACA, and is moving ahead on its health benefit exchange, which plans to begin open enrollment October 1, 2013.