Business

Healthcare Law Employer Mandate Delayed Until 2015

The Obama administration will delay enforcing the Affordable Care Act's requirement that businesses with more than 50 employees provide insurance—one of its most hotly opposed provisions—until  2015. Many associations reacted positively to the news.

One of the more controversial—and fundamental—elements of the Affordable Care Act (ACA) is taking a backseat until after the midterm elections.

I think there has been a growing drumbeat on everything, from concern on the Hill to reports on teachers’ aides saying their hours were dropped, and I think the pragmatic and wise course of action was taken.

In a move largely cheered by business groups, the Obama administration announced Tuesday that it would delay the enforcement of one of the more contentious portions of the landmark healthcare law, the requirement that companies with more than 50 workers provide health insurance, to give the affected businesses more time to prepare for the changes in reporting. (Companies with fewer than 50 employees are not affected by the mandate.)

As The Hill notes, however, the move does not affect the mandate for uninsured individuals, who will still be required to purchase personal  coverage by January 1, 2014. More details:

The statement: In a blog post Tuesday, White House Senior Adviser Valerie Jarrett said that the delay will allow time to simplify the reporting required under the ACA. “Some of this detailed reporting may be unnecessary for businesses that more than meet the minimum standards in the law,” she explained. “We will convene employers, insurers, and experts to propose a smarter system and, in the interim, suspend reporting for 2014.” The moratorium, she said, is intended to allow employers more opportunity “to test the new reporting systems and make any necessary adaptations to their health benefits” before the mandate goes into effect.

Other provisions still on track: The administration emphasized that other portions of the law—most notably, the creation of  health insurance exchanges—will be implemented on time. This contradicts a June report by the Government Accountability Office  that suggested  some aspects of the exchanges’ implementation were behind schedule. Associations have been involved in helping get the exchanges get off the ground and informing the public about them, including the American Library Association.

Association reaction: The National Restaurant Association, the International Franchise Association, and the National Retail Federation, among others, hailed the news of the delay. “I think there has been a growing drumbeat on everything, from concern on the Hill to reports on teachers’ aides saying their hours were dropped, and I think the pragmatic and wise course of action was taken,” NRF Vice President Neil Trautwein told Politico. The delay will give business groups more time to work with the IRS as it hashes out regulations under the law, he said.

Meanwhile, some critics have suggested that the administration should go further. The Washington Post’s Ezra Klein, a noted liberal pundit, argued that the employer mandate should be repealed altogether. “By tying the penalties to how many full-time workers an employer has, and how many of them qualify for subsidies, the mandate gives employers a reason to have fewer full-time workers, and fewer low-income workers,” Klein wrote.

He also noted a point made by Mark Duggan of the University of Pennsylvania’s Wharton School of Business: The employer mandate’s coverage is likely limited, as most businesses with more than 50 employees already offer their employees some form of health insurance. “It’s basically 10,000 or so employers who have more than 50 employees and don’t offer coverage,” Duggan told Klein.

Conversely, The Baltimore Sun’s editorial board called the move “an embarrassment [for the Obama administration], but it doesn’t begin to undermine the good that will be done by the Affordable Care Act.”

(iStockphoto/Thinkstock)

Ernie Smith

By Ernie Smith

Ernie Smith is the social media journalist for Associations Now, a former newspaper guy, and a man who is dangerous when armed with a good pun. MORE

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