Employer Mandate: Let’s Push it Back a Year
Jul 09, 2013
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Posted by Javan Porter The Obama administration took some muscle out of the Affordable Care Act (ACA) by pushing the Employer Mandate implementation to 2015. The administration has started marketing efforts, but this mandate must be a hard sell. The policy calls for any business that employs over 50 full time workers (30 hours per week) to provide insurance for their employees.
The conundrum that is the ACA implementation has caused companies and the general public to panic. This panic has caused the Obama administration to believe that it will further suppress the growth of a sluggish economy. Valerie Jarrett, a senior adviser to Obama, stated “We believe we need to give employers more time to comply with the new rules.” The Obama administration must be hopeful that another year will allow companies time to educate themselves while their companies rehabilitate the economy.
A common misconception about the Employer Mandate is that the companies of this size do not already provide insurance. The Congressional Budget Office found that 98% of companies who employ over 200 already provide insurance. Also, 94% of companies that employ between 50 and 199 employees provide insurance. These businesses are already providing insurance for competitive reasons, but they fear the regulations and paperwork brought forth by the ACA.
The regulation that companies fear the most is the 30 hour work week to constitute a “full time employee.” This policy will drive companies to cut hours for part-time employees to keep from paying their insurance. This will create a scenario of workers being paid less and still not receiving health insurance. The backlash of the 30 hour work week is one of the main reasons for the delay. Senators Donnelly and Snowe have proposed an amendment to set the bar at the traditional 40 hours. A positive aspect of the delay is it will allow this debate to run through 2014.
The Obama administration also might be avoiding a train wreck going into the 2014 elections. A failure to adequately implement “Obamacare” would give the GOP an edge in campaigning. The consequence of the delay is not certain. The good news for the self-employed is this carries little impact on your business. The future of the ACA is not clear, but this proves nothing is set in stone.