by Katherine Restrepo
Director of Health Care Policy, John Locke Foundation
The Blog Post Announcement
Last Tuesday evening, the presidential administrationdelayed implementation of the employer mandate from its original scheduled date of January 1, 2014 to January 2015. This announcement was made via a blog post — not a televised press conference, but a blog post — by Mark Mazur, Assistant Secretary for Tax Policy in the Treasury Department.
Obviously, the Obama Administration has no shame in breaking its own federal health law to fully implement it. The employer mandate now becomes the second key provision under the federal health law that has been delayed. This past April, the Small Business Health Options (SHOP) exchanges were rescheduled to go live from the beginning of 2014 to 2015.
Why the Delay?
The employer mandate requires businesses with 50 or more employees to offer federally qualified health coverage to full-time employees. In the world of the IRS, full-time employment now equates to 30 hours a week. Employers who do not offer health insurance will face a $2,000 penalty per employee, minus the first 30 workers. Employers even face a penalty if they do offer health coverage to employees. If an employee cannot afford employer-sponsored coverage and qualifies for a premium assistance subsidy via a state-established health exchange, his employer is fined $3,000.
For an employee to become eligible for a premium assistance subsidy on the health insurance exchange, the employee must submit a 3 page application (7 pages for families) to the IRS. The IRS must also collect data about the employee’s insurer, the employer, and the employee’s annual household income — meaning other streams of income beyond the employee’s salary/wages — as well as calculate the number of dependents in that household.
The problem that employers face is that, even if they offer qualified health plans to their employees, they won’t necessarily know for certain whether one of their employees may become eligible for a subsidy if their coverage is deemed unaffordable at some point. Therefore, employers won’t know if they will be hit with a fine, even if they are attempting to avoid one.
This Week’s Buzzword: "Flexible"
Obamacare proponents should feel embarrassed by the administration’s lack of preparedness and authoritarian manipulation of its major provisions. But supporters of this socialist piece of legislation which will require everyone to take collective responsibility for paying for other people’s health care coverage — even for a family of four earning $90,000 — simply keep calm and carry on by being "flexible."
CNS News reports on White House Press Secretary Jay Carney’s response to the employer mandate delay:
A reporter asked Monday, "What do you say to all those people who have to follow the law, when they see the administration making some of these changes and they say, why do we have to follow the law and you guys can change it?"
Carney challenged the premise of the question.
"Well everyone has to follow the law, but we made determinations that were in the interest of successful implementation of the Affordable Care Act," Carney said. "We are flexible, because that’s the right thing to do and to be." (emphasis added)
Meanwhile, Valerie Jarrett, a senior adviser to president Barack Obama, commented via Politico Pro:
[W]e are working hard to adapt and to be flexible in employer and insurer reporting as we implement the law. (emphasis added)
Mark Mazur, Assistant Secretary for Tax Policy at the Treasury Department, writes via blog post:
Just like the Administration’s effort to turn the initial 21-page application for health insurance into a three-page application, we are working hard to adapt and to be flexible about reporting requirements as we implement the law. (emphasis added)
Furthermore, supporters claim that the delay is nobig deal. Of the 5.7 millionbusinesses nationwide, 210,000 firms operate with more than 50 employees. Therefore, only 4% of businesses, most of which already offer health coverage, are affected by the employer mandate.
But it doesn’t matter if these businesses already offercoverage to workers, because this coverage still has to be federally qualified in 2015. Employers will still have to foot a higher bill or reduce the number of workers or hours to avoid penalties.