Did the administration admit that implementing the Patient Protection and Affordable Care Act has become "train wreck?"
Bloomberg reports that the health care law’s employer mandate will be delayed for one year. Mark Mazur, Assistant Secretary for Tax Policy at the U.S. Department of the Treasury, explains:
[W]e are extending this transition relief to the employer shared responsibility payments [aka the employer mandate]. These payments will not apply for 2014. Any employer shared responsibility payments will not apply until 2015.
U.S. Chamber President and CEO Tom Donohue welcomed the news:
Since the beginning of the health reform debate the U.S. Chamber has consistently stated the employer mandate and other burdensome provisions of Obamacare would be harmful to job creation and economic growth. The Administration’s decision to recognize this fact yesterday and delay the implementation of the employer mandate is welcomed by the business community and will help avoid some serious near-term economic consequences of this law. As we move forward, the Chamber will continue to work with the Administration and lawmakers to mitigate potential problems associated with Obamacare implementation.
President Obama’s advisor Valarie Jarrett said the mandate was delayed because they were “listening to businesses.” The administration probably also saw polls like this on from Gallup [via Hot Air] that found that “forty-one percent of the businesses surveyed have frozen hiring because of the health-care law,” and the U.S. Chamber’s Small Business Outlook Survey that found that 32% of small businesses plan to reduce hiring and 31% will cut back hours to reduce the number of full-time employees because of the employer mandate.
As the U.S. Chamber’s Randy Johnson, Senior Vice President of Labor, Immigration & Employee Benefits, emphasized to Bloomberg, “The administration has finally recognized the obvious -- employers need more time and clarification of the rules of the road before implementing the employer mandate.”
They might have gotten indigestion from reading stories about businesses, state and local governments, schools, and other employers explaining that part-time workers’ hours would be cut to minimize the hit they’d take from the employer mandate. In addition, they probably noticed the groundswell in Congress to fix parts of the law like bipartisan efforts to restore the standard definition of full-time employment back to 40 hours per week.
Whatever the reasons, the one-year delay of the employer mandate is welcome news. It not only gives businesses an extra year to understand and prepare for the law, but this can be a first step in making significant changes. For example, in addition to restoring the definition of full-time employment, there are efforts in Congress to repeal the Health Insurance Tax. And the employer mandate might go away entirely if efforts in Congress to repeal it succeed.
The U.S. Chamber’s Health Care Solutions Council urges a similar transition approach (through regulations or legislation) that phases in such items as community rating requirements and Essential Health Benefits (EHBs) for existing plans to “mitigate the major disruptions in coverage or costs that would occur otherwise.” The U.S. Chamber further articulated this approach in testimony last week emphasizing that the regulators should “adopt a compliance assistance approach as opposed to strict enforcement” as a way “to reduce administrative burdens, preserve flexibility, and reduce premium increases.”
This delay will give us a chance to change direction and work toward actually fixing our health care system to lower costs, improve access and quality, and do so without hurting job creation and the economy.