Now the Blood is in the Water

Last week, the Obama Administration issued a notice that the Affordable Care Act’s (ACA) “pay or play” employer mandate and reporting requirements, which were set to take effect on January 1, 2014, are being postponed until 2015. Now the blood is in the water with all of Washington asking “what’s next to be delayed?” It’s not even clear the Administration had the legal authority to delay a provision of the law.  While not a big deal for most employers or payers — most employers already offer comparable coverage to full-time workers — the political ramifications are huge.

This postponement means that an employer won’t be penalized if it does not offer its full-time employees affordable health insurance in 2014 that’s comparable to what will be offered in the exchanges — with a penalty of $2,000 per full-time employee. The ACA also requires health plans and employers to report certain information on health insurance coverage to the IRS in 2014. The Administration also postponed this reporting requirement until 2015, though it still encourages these entities to voluntarily report coverage information in 2014.  Like that’ll happen.

Predictably the business interests that fought for the delay had nice things to say for the Administration’s decision.  “I think this is less about readiness and more about the fact that they’re trying to be flexible in their implementation,” said Rhett Buttle, Vice President of the Small Business Majority, which supports the ACA. “It does seem like an olive branch.”  But less charitable business interests will see this victory and will start lining up for additional concessions.

The implementation of the rest of the Act, including the health insurance exchanges, individual mandate and other reporting requirements, are unaffected by the announcement and, at least for the moment, are proceeding on schedule — until they’re not.

The event seems to be bolstering the arguments of both sides of the health reform chasm.  The ACA’s opponents just got their sneering “I told you so”. They say the delay is Obama’s admission of the law’s failures, and once again the “repeal and replace” chorus just warmed up for another show.  White House Senior Adviser, Valerie Jarrett, defended the delay as listening to employer concerns.

We can’t lose sight of the fact that this is the second major delay in the implementation of ObamaCare, and it’s playing right into the Congressional Republican narrative that the Administration can’t get its act together and that this is going to be one hot mess starting in October.  HHS Secretary Sebelius better have her own Capitol Hill parking spot lined up.

Resources

Read Gorman Health Group’s recap of the 2013 GHG Forum, which includes details regarding preparing for the health insurance exchanges.  This free download is available on the Point.