Employer mandate delay about politics, not employers
02/12/2014 5:48 PM
11/12/2014 3:54 PM
President Barack Obama has more in common with his Republican colleagues in Washington than he lets on: They all seem to fear what will happen if the Affordable Care Act is fully implemented.
At least that is what one would assume after the administration’s series of unilateral delays of key components of the law.
The latest change — the 28th according to some reports, but who’s counting? — occurred Monday. It postponed the supposedly important but dizzyingly complex employer mandate.
The Cliff’s Notes on this particular provision are thus: The mandate requires most businesses employing 50 or more full-time equivalent workers to provide government-prescribed health insurance to employees. If a business fails to provide affordable coverage, and at least one full-time employee qualifies for a premium tax credit and uses it to buy coverage in the health insurance exchange, the business faces a steep penalty.
The mandate is complicated by the fact that the law has changed the definition of a full-time employee to one working an average of 30 hours a week, not 40, as was codified by existing labor law.
There is a bounty of evidence suggesting that in preparation for the mandate, businesses — particularly those on the cusp of 50 employees — have already reduced worker hours or cut other benefits to help pay for the added costs of ACA-approved coverage. All this during tough economic times when a reduction in work hours creates a hardship for many who are struggling to get by.
Originally, the mandate was supposed to have taken effect in January 2014. Last year it was delayed — the announcement came by way of a White House blog post — until 2015, and this week, the administration quietly announced that the more than 100,000 employers with 50 to 99 workers have until 2016 to comply.
Businesses with 100 workers or more will see their requirements eased as well; they can avoid the fine if they cover 70 percent of full-time workers by next year, instead of the 95 percent that the law originally required.
The president defended the “adjustment” as one impacting only a “small percentage” of employers and as an opportunity for businesses to “get right with the law.”
That sounds awfully nice.
But the election year concession is a bit too conspicuously timed, suggesting that the decision is less about helping employers and more about helping politicians.
At least a half-dozen red state Democrats who supported the law are fighting to keep their Senate seats, and consequently, their chamber’s majority.
All of those senators supported the ACA and cannot endure more public discontent with a law that remains unpopular, according to the latest Gallup Poll, by a 51-41 margin.
But the mandate delay alleviates some of the immediate concerns of a powerful business community that could easily use its influence to help flip the Senate to the party that has advocated for the law’s full repeal for years.
Whether the decision to delay was calculated or ad hoc, it obliquely ignores the fact that any postponement in implementation will have significant unforeseen effects. Consider how at the time the law was being sold, its proponents told us that each of the law’s many complicated elements was essential to making it function as envisioned.
Bloomberg columnist Megan McArdle likens the law to a Rube Goldberg machine: “All the parts have to work just so for the thing to come off.”
And Manhattan Institute healthcare expert Avik Roy explains further that “delaying the employer mandate also messes up the individual mandate, because you can only enforce the individual mandate if employers report whether or not you’ve accepted their offer of health coverage.”
So the house of cards continues to collapse.
Finally, the delay suggests something a bit more dubious than just election year antics. It speaks to a palpable fear within the administration that once fully implemented, the law will become even more unpopular with huge swaths of the American public.
If Obama is as confident in the law as he purports to be, he should cease delaying and fully implement it, as written, then take the credit or face the consequences.
About Cynthia Allen
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