March 23, 2010 — President Barack Obama signs into law the Patient Protection and Affordable Care Act, referred to by many as Obamacare.
June 28, 2012 — The United States Supreme Court rules, 5-4, in favor of nearly all the legal points of contention in Obamacare.
July 2, 2013 — The Obama administration announces that it will delay implementation of Obamcare’s employer mandate, requiring all firms with 50 or more employees to offer health coverage or pay fines, until 2015.
Last week, in what many are calling an admission of impending failure, the Obama administration, after passing Obamacare through Congress and surviving a Supreme Court challenge, chose to delay one of the major provisions of the law.
The employer mandate — set to go into effect on Jan. 1, 2014 — will be delayed a year until Jan. 1, 2015, according to the Treasury Department, in order to allow the administration time to consider ways to simplify the new reporting requirements. Also, according to the department, it will allow more time for businesses to implement the required changes.
Or, as many Republicans interpret the message, the delay simply is a ploy to help Democrats prevent a mid-term election disaster next year by postponing what is one of the most egregious mandates of a flawed policy.
Regardless of the true reasons behind the delay, the news is a relief for businesses with 50 or more employees that have been struggling with the complexities of the requirements.
With the law stipulating that a full-time employee is counted as working a 30-hour week as opposed to the general business practice of 35, many businesses have been hiring more part-time workers. Small businesses wanting to expand but attempting to avoid the 50-worker threshold have become known as 49ers.
Another confusing aspect of the mandate is the requirement that these businesses provide a minimum level of health insurance for their full-time employees or pay a fee of $2,000 for each uninsured full-time worker. Establishing and understanding what constitutes a minimum level has proven to be difficult at best.
The employer mandate is not to be confused with the individual mandate, which still is set to go into effect in 2014 and will require individuals to carry health insurance or pay a penalty to the IRS.
Although a delay in implementation of the employer mandate may somewhat soften the blow, the employer mandate ultimately will drive up the cost of labor, resulting in an increase in unemployment.
Also, the delay may lead more people to enroll in Obamacare’s government-subsidized insurance exchanges either willingly or at the urging of employers, which could further escalate the decrease in employers offering health coverage. In 1996, according to the Employee Benefits Research Institute, almost 64 percent of Americans had employment-based health insurance. By 2011, that number had fallen to around 55 percent, according to the Bureau of Labor Statistics.
The decrease in employment-based health insurance may not be entirely bad, as insurance bought by individuals on their own may lead to more personal responsibility which is being advocated by health-care professionals.
However, thus far, the expected savings from exchanges have not proven to hold true — meaning, of course, more government spending.
Somewhat lost in the overall excitement of the employer-mandate delay is the question of whether the executive branch, i.e., the president, has the legal authority to delay the mandate.
The law is quite clear that the employer-mandate provision shall take place Jan. 1, 2014. It does not stipulate that implementation shall be at the preference of the president, although many will argue that the Obama administration has made a habit of selective enforcement of laws such as immigration and welfare reform.
Will the president ask for Congress’s approval to delay this law? Will the Republican-controlled House of Representatives demand it?
Regardless, the delay in the employer mandate mostly has been welcomed by all sides, as it generally is viewed as a job killer and disincentive for growth. And could the delay ultimately lead to the repeal of the employer mandate provision of Obamacare? Earlier this year, a bill was introduced in the House and Senate to do just that.
A delay is good. A repeal? Even better!
Carter can be reached at 421-B State Capitol, Atlanta, Ga. 30334. His Capitol office number is 404-656-5109.