What the employer mandate delay means for ObamaCare

The Obama administration is pushing back a key requirement until 2015

On Tuesday, the Obama administration announced that it is pushing back a significant element of the Affordable Care Act — the requirement that businesses with 50 or more employees provide health insurance — to 2015, from its scheduled 2014 start.

Businesses are generally very pleased. And ObamaCare opponents have seized on the announcement as evidence that the legislation is fundamentally flawed.

ObamaCare's employer mandate, like its individual mandate, is really more of a penalty — medium and large companies that don't provide their employees health benefits will have to pay a fine. The Treasury Department says it is delaying enforcing the penalty because it has heard the business community's "concerns about the complexity of the requirements and the need for more time to implement them effectively." The one-year delay has two goals, says Treasury official Mark J. Mazur:

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. [Treasury Notes]

Republicans and other ObamaCare critics see other goals. Mostly, political ones. And politically, this is "deviously brilliant," says Douglas Holtz-Eakin at American Action Forum. "Democrats no longer face the immediate specter of running against the fallout from a heavy regulatory imposition on employers" in the 2014 midterms.

Sen. Lamar Alexander (R-Tenn.) managed to fit both the political argument and the GOP's policy charge in one concise sentence: "Pushing the implementation of the employer mandate until after the 2014 election confirms the law was a historic mistake."

However, many supporters of Obama's landmark health care law, like The Washington Post's Ezra Klein, say good riddance to bad policy. "Delaying ObamaCare's employer mandate is the right thing to do," Klein says. "Frankly, eliminating it — or at least utterly overhauling it — is probably the right thing to do."

It doesn't affect that many businesses: There are maybe 10,000 companies with 50+ employees that don't already provide health coverage, out of 5.7 million. And as structured, it "gives employers a reason to have fewer full-time workers, and fewer low-income workers," Klein notes.

Josh Barro at Business Insider says this may be a sign that Democrats are "looking for a way to avoid imposing it ever," shifting the cost of health care from employers to taxpayers:

The employer mandate is part of a suite of policies aimed at accomplishing two difficult tasks: Expanding health insurance coverage to the 17 percent of Americans who don't have any, while ensuring the 45 percent of Americans currently covered through employer-based plans stay put. This is very hard to do (if you hand out subsidies to the uninsured, more people will become "uninsured" to get the subsidies) and it's why most approaches to health insurance reform favored by left, right and center health policy wonks involve moving away from employer-based coverage. [Business Insider]

However, in terms of how this delay will affect ObamaCare, it's sort of a nothingburger, says Jonathan Cohn at The New Republic. "The employer mandate is both weaker and less important than most people realize," he says, and the delay will have almost no federal budgetary impact. "Delaying or modifying the employer mandate is exactly the kind of adjustment many experts expected the law would need–and that, in a less polarized environment, would happen through Congress without nearly this much fuss."

But the latest news could certainly have a political impact. "This is Washington, folks, and we're talking about ObamaCare," says Jared Bernstein at The New York Times.

There will be much hay made of this delay in coming days. Conservatives will argue that this confirms that the law is unmanageable — which is a bit rich, since many of them have been trying to kill it, block it, and stop it in its tracks...

I think it's an unfortunate delay of an important but relatively small piece of the bill, more growing pains of the type I'm sure Medicare had when it got going than anything existential. But that's not how it will play in the hurly-burly of the next few days of Washington politics. [New York Times]

Indeed, the delay comes at a bad time for the Obama administration, say Jennifer Haberkorn and Jason Millman, and Brett Norman at Politico, noting that the White House is "building momentum for its public education campaign and trying to send out signals that everything was on track for enrollment to begin in October."

There is one "silver lining for the White House," though, the Politico teams says:

It should quell some of the outcry from the business community about the paperwork burden, and it may stop some of the drumbeat of businesses cutting their workers' hours to avoid having to cover anyone who works 30 hours or more. But if that bad news subsides, the pattern of Obamacare is there's always another critical storyline to replace it. [Politico]


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