The announcement that the mandate under the Patient Protection and Affordable Care Act (PPACA) for employers to offer their employees a minimum level of affordable health coverage or pay a penalty would be delayed until January 1, 2015, gives employers scrambling to comply with the law’s requirements some breathing room. “This is viewed as a welcome reprieve by employers,” says Mike Thompson, a principal with PricewaterhouseCoopers Human Resource Solutions in New York. “It gives employers more time to get ready and it takes away the threat of serious tax penalties in 2014.”

The question is, though, whether the delay will impact the strategic decisions companies make about employee health coverage for 2014. Many employers found that the PPACA’s mandate had marginal impact on their operations beyond having to modify their systems to manage coverage eligibility and to record hours for part-time or variable employees. “Those employers are likely to continue to move forward in the same direction,” says Thompson. “The delay gives these employers a chance to test their systems and make sure that people aren't falling through the cracks.”

However, some employers will have to make important decisions in the wake of the mandate’s delay. For example, employers that offer mini-med plans that place annual maximums on benefits could face a coverage gap for those employees if they delay their health benefits compliance strategy for a year. Waivers allowing the continued use of mini-med plans under the PPACA have not been extended. Therefore, employers that had been offering mini-med plans have a choice: either proceed with offering coverage as if the employer mandate were still going into effect on January 1, 2014, or do not offer any coverage in 2014 to employee populations that had been covered by mini-med plans.

Another group facing a similar question is employers that have not provided health coverage that met PPACA requirements but planned to do so in 2014. Do they move forward with their coverage plans despite the delay or do they delay until 2015 and have employees purchase their own coverage on the state health insurance exchanges. Remember, the mandate that individuals carry a certain level of health insurance is still going into effect on January 1st.

This is where the wrinkle occurs for employers that delay offering coverage. If those uncovered employees purchase health coverage on an exchange, “they could be eligible for subsidized coverage,” says Thompson. Then a year later, when the employer implements its benefits strategy to satisfy PPACA requirements, “those employees will find they are no longer eligible for that subsidized coverage, which might have provided better coverage for lower premiums than what the employer offers,” he says.

One benefit of delaying the rollout of their PPACA-compliant benefits strategies until 2015 is that employers on the sidelines could see what competitors are doing on the benefits front. Having not committed to a specific benefits strategy, those employers who wait until 2015 could modify their benefit strategies based on what they see from competitors’ plans. The downside to this approach, of course, is that those employers that delay offering coverage until 2015 “could find themselves out of line with the market standard for coverage in their industry,” says Thompson.