Wednesday, July 3, 2013

ObamaCare Employer Mandate/Fines Delayed

In case you missed the news the Obama Administration announced that by the authority vested in it from (I'm not sure exactly since the implementation date was specifically written in law) it was delaying the requirement of the employer mandate to provide health insurance or face fines until January 1st, 2015. It thus gave something of a victory to conservative and business groups who had argued that the employer mandate would cost jobs, lower wages and make the cost of doing business more expensive. Because most large companies already offer health insurance coverage for their workers the impact on worker coverage is not expected to be that great.  

Of course, many people who were against the law popularly known as ObamaCare had already pointed this out and claimed that the employer mandate was a tremendous interference in the private marketplace which was largely unnecessary. The Administration had previously ignored these complaints but for some reason recently changed its mind.
Employers who don't provide health insurance will be spared penalties of up to $3,000 per worker until 2015, a one-year delay of a major component of President Barack Obama's health care reform law, the Treasury Department announced Tuesday. Under Obamacare, companies with at least 50 full-time employees are required to provide qualifying health benefits to workers or face financial penalties called "shared responsibility payments." The provision of the law aims to shore up and strengthen the system that provides health benefits to most covered Americans. Under regulatory guidance to be published next week, the Obama administration will free companies from this mandate and from rules that they report information about their health benefits to the federal government next year.
"During this 2014 transition period, we strongly encourage employers to maintain or expand health coverage," Mark Mazur, assistant secretary for tax policy at the Treasury Department, said in a statement. The change does not affect people who will buy health insurance on their own or small businesses that will buy coverage through the law's health insurance exchanges.
More than half of Americans, 170 million people, are covered by employer-sponsored health insurance, according the census data. Of companies with at least 50 workers, 94 percent already offer health benefits, a survey by the Henry J. Kaiser Family Foundation shows. The one-year delay of the penalties won't have a meaningful effect on jobs being the leading source of health care coverage, said Paul Fronstin, a senior research associate with the Employee Benefit Research Institute.
"The fact is, employers have been offering coverage voluntarily for how many years now. They didn't drop it before the law was passed. They offered it for business reasons," Fronstin said. "I don't think you'll see a mass exodus because of this."
I am among other things an IT project manager, albeit a relatively low ranking one. Missing the implementation date is usually a very bad thing. It normally means that the project manager, team leaders and other project sponsors proceeded on bad information or that somebody at a higher level withdrew their support. It is definitely the kind of thing which gets you dinged on your performance review. Make a habit of it and you can expect to see a few "did not meet expectations" in your 360 degree comments. Pick up a number of those and you can forget about staying on track for your next promotion or salary increase. You might not get a good project the next time and/or be exiled to an undesirable area of your company. But I digress.  
The Administration and supporters will probably wish to spin this as no big deal. And they may well be right. Things get delayed and pushed back all the time, (remember Bush's Medicaid Modernization Act ?) especially in an organization as huge as the US government. Trying to enforce employer mandates may have been a small section of ObamaCare and some supporters are arguing it wasn't even that important anyway.  And for now anyway the mandate for individuals to purchase insurance is still planned to proceed on time.  But this is at least the second time this year that the Administration has decided that what the law required wouldn't actually work and either delayed implementation or gave people a pass. In April the Administration admitted that workers at small businesses wouldn't actually be able to choose their own health care and would instead need to accept what their employers offered. I was not and am not a supporter of ObamaCare. I do not like the individual mandate. I do not think that premiums will drop for most people. But what really interests me about this latest move are two things.

  1. What gives any President and/or his Administration to suspend implementation of a law. The fact that other Presidents have done this is of little interest to me. If President Obama can say well we aren't going to require this until 2015 what if anything prevents a future conservative President, as unlikely as that seems now, from saying we won't require it until 2175? So it's not technically a repeal, it's just a refusal to enforce the law. I'm not sure I'm fond of executives deciding which laws to enforce. Yes I know it may be necessary sometimes but this particular law had a hard date written into it. So let's stick to that date.
  2. Am I being somewhat cynical in noticing that the new planned date for employer mandates just happens to be after midterm Congressional elections? To me that means that in the short term at least the Administration does not expect the benefits of employer mandates to be immediately obvious to voters. Because if they did they would be moving up the implementation date, not delaying it by a year. 

But who knows. Perhaps I am just a dead-ender on this issue. I don't say no to that. I do find it somewhat humorous that people who waved bloody shirts and told us that any delay to this law in its entirety would make people DIE and opponents would be responsible, are now seemingly ok with a year long delay for, what looks like to me, primarily political reasons. I think, my feelings about this law aside, the Administration is setting a bad precedent by seemingly giving in to constant criticism. Because I can absolutely guarantee that now that the employer mandate has been delayed, people opposed to other sections of the law will now gleefully ask, why don't we delay these parts as well.

What's your take?

blog comments powered by Disqus