The Patient Protection and Affordable Care Act requires businesses with 51 or more workers to provide qualifying employer-sponsored health coverage or else face a penalty of $2,000 per employee.
The sectors that will be most impacted by the delay are hospitality, retail, entertainment and agriculture. These sectors tend to rely on part-time and seasonal employees, according to Steve Wojcik, vice president of public policy at the National Business Group on Health.
Observers say restaurant chains and big-box retailers, which typically don't provide health insurance and strongly opposed the employer mandate provision, will particularly benefit from the delay.
On the other hand, more than 90% of businesses with more than 50 employees already provide employee-sponsored benefits, Wojcik notes, citing data from the Kaiser Family Foundation.
Ario said the Obama administration's decision to delay enforcing the employer mandate was the right call given two significant problems percolating in the employer community. The first was a requirement on reporting the number of employees considered full-time equivalents for the purpose of determining if a business has 51 or more employees. He says the requirement was cumbersome, and the delay will give the Obama administration time to simplify it.
The second issue, he said, was that while most employers affected by the mandate already provided health coverage for full-time employees, expanding the definition of full-time to 30 hours a week could present financial issues for some companies.
Overall, however, Ario downplayed the long-term impact of the decision. “All of this is marginal to the overall program of expanding coverage through the individual market and shared responsibility” provision.
In interviews with healthcare stakeholders across a variety of fields, all agreed that the delay of the provision primarily will affect employees who work between 30 and 40 hours of week, who typically are not currently eligible for employer coverage.
But just because the provision is delayed by a year doesn't mean these workers won't get a boost from Obamacare in obtaining health insurance. Many still will be able to get subsidized coverage through their state's individual health insurance exchange, since a significant percentage have an annual income under 400% of the federal poverty level.
Depending on their income, this could be a better deal for them than receiving coverage through their job. Workers with qualifying employer-sponsored coverage cannot receive government subsidies for coverage.
From a policy perspective, however, that could mean higher federal spending on subsidies for these workers who otherwise would have been covered through their employers in 2014 under the mandate, according to Sabrina Corlette, project director at the Center on Health Insurance Reforms at Georgetown University's Health Policy Institute.
But whether the delay will mean an increase in enrollment on the state insurance exchanges is up for debate. “I don't think a significant number of additional people will enroll in the exchanges because of this decision, Ario said. “You cannot accurately predict what will happen.
At the end of 2014, Ario noted, employees who buy coverage through the exchanges will have a big decision to make: Either stay in the individual exchange or switch to employer-sponsored coverage in 2015. If they choose to continue with an individual policy purchased on the exchange, however, they will lose their subsidy, which only goes to people without employer coverage.
While some experts say the delay won't have a big effect on coverage, many stakeholder groups reacted strongly to the administration's decision to delay the mandate. The American Hospital Association in a statement described the delay as “troubling for those individuals who will not gain coverage through their employers” and added that it also comes at a time when there is “significant uncertainty regarding Medicaid expansion.” The group called on the administration to eliminate the reform law's cuts in the Disproportionate Share Hospital program, which supports care for indigent patients.
But Ron Pollack, executive director of healthcare consumer group Families USA, a strong supporter of the reform law, saw the reaction following the announced delay as much ado about nothing. “With premium subsidies, Medicaid and state (exchanges), we are moving forward … The key aspects of the ACA designed to increase coverage are going forward.”
This afternoon, Republican leaders of the House Energy and Commerce Committee sent a letter to HHS Secretary Kathleen Sebelius and Treasury Secretary Jack Lew requesting documents and other information regarding the decision to delay implementation of the mandate.
“Despite delays and missed deadlines, administration officials had repeatedly testified before Congress that they were still on schedule to implement the law,” Rep. Fred Upton, R-Mich., said in a written statement. “Yesterday, they admitted that wasn't the case, and it's clear we have no idea the full scope of delays and disarray that may be coming. The American public deserves answers.”
Follow Jonathan Block on Twitter: @MHjblock
