Administration Delays Employer Coverage Mandate

The Obama Administration on Tuesday announced a one-year delay in the health reform mandate that larger employers provide health care coverage for their workers or pay penalties. The decision postpones the effective date to 2015.  

While the postponement technically does not alter other key provisions of the Affordable Care Act (ACA), specifically those establishing health insurance exchanges in each state where uninsured individuals can shop for policies, it adds to the uncertainly about the Administration’s effort to put those provisions into effect by January 1, 2014.  Under the law, most Americans will be required to have insurance in January 2014, or they will be subject to tax penalties. The announcement late Tuesday did not say anything about delaying that requirement or those penalties.

The ACA, which was passed by Congress in 2010, requires employers with more than 50 full-time workers to offer them affordable health insurance starting next year or face fines. Under the provision to set up state-based insurance exchanges, subsidies should be available to many lower- and middle-income people who do not have access to coverage from employers or other sources. It may be difficult, however, for the exchanges to know who is entitled to subsidies if employers do not report information on the coverage they provide to workers.  Enrollment in the exchanges is to begin October 1st of this year, with insurance coverage taking effect on January 1, 2014.  Experts cite concerns that the scheduled go-live date for the health insurance exchanges will be difficult to meet.

While there is little available today in the way of Administration explanation for the delay, officials with the U.S. Treasury Department indicated that the delay will allow the Department to consider ways to simplify the new reporting requirements consistent with the law and that it will provide time to adapt health coverage and reporting systems while employers are moving toward making health coverage affordable and accessible for their employees.

The employer insurance coverage mandate remains a politically-charged component of the nation’s health care reform debate.  Conservatives commenting on Tuesday’s delay announcement renewed their calls for repealing the coverage requirements while Administration supporters expressed their commitment to work with the business community to find common ground on lowering the number of uninsured workers in this country.