White House announces ACA employer mandate delays
While there have been debates on many healthcare reform issues stemming from the Patient Protection and Affordable Care Act, one of the central issues affecting government officials, medical professionals, insurance representatives and payers has been implementation scheduling. There have been numerous concerns surrounding meaningful use incentive stages for electronic health records and the switch to the World Health Organization's tenth revision of the International Statistical Classification of Diseases code sets, as well as many other aspects of federal healthcare reform.
One of the most contentious aspects of the ACA has been the federal requirement that businesses with more than 50 employees must provide their staff members with health insurance. This employer mandate was seen as a step toward greater access to affordable care for Americans by some, while others voiced concerns about the burdens this law would play on U.S. businesses.
Obama Administration pushes employer mandate to 2015
Due to the criticism by some within the healthcare industry that the employer mandate deadline of 2014 was too soon for effective implementation, the federal government recently announced that the provision would be delayed by one year until 2015, according to Healthcare IT News.
The reason behind the Obama Administration's decision to delay the employer mandate aspect of the ACA is due to opposition from some U.S. employers that the 2014 deadline was too soon for them to offer health insurance for all employees. Those that failed to meet the cutoff date of Jan. 1, 2014 would be subjected to a $2,000 fine per full-time employee without healthcare coverage. As many saw the ACA's requirements for employee health insurance as overly difficult and time-consuming, some employers stated that they would likely cut hours or reduce staff size to brace for federal penalties.
"We have heard concerns about the complexity of the requirements and the need for more time to implement them effectively," Mark Mazur, assistant secretary for tax policy at the Department of the Treasury, wrote in a blog post. "We recognize that the vast majority of businesses that will need to do this reporting already provide health insurance to their workers, and we want to make sure it is easy for others to do so."
In the meantime, the federal government will be working with U.S. employers and officials in the healthcare industry in order to find ways to make the employer mandate requirements easier to understand and implement.
Ripple effect of the employer mandate delay
With the ACA's employer mandate provision effectively delayed until 2015, many within the healthcare industry are wondering how this will affect other aspects of healthcare reform. FierceHealthPayer reported that health insurance companies and the individual mandate law may be affected in the wake of this one-year delay.
It seems unlikely that insurance providers will be dramatically impacted by the employer mandate decision, especially as the majority of American businesses already offer health insurance without any federal requirement. Of the entire American workforce, only about 12,000 employers and 1.5 million employees will be affected by the employer mandate and remain without health insurance as based on research from the Kaiser Family Foundation.
However, with the individual mandate still set for 2014, some are wondering whether the Obama Administration will delay this provision by a year as well. This would give Americans without any form of insurance until 2015 to make arrangements, though this may have a negative effect on the online insurance exchanges set to open in fall 2013.
"That would be a major problem or concern for the insurance industry," Chris Rigg, an analyst with Susquehanna, told CNBC. "Then you'd be subject to adverse selection where only the sickest people get the insurance through the exchanges next year, but those that are healthy will probably opt out, because there's no penalty if they choose not to buy the insurance."
