Published On: Wed, Jul 3rd, 2013

Employer mandate in Obamacare delayed until 2015

The Obama administration announced Tuesday that it is delaying the major employer provision in the health care overhaul, putting off until 2015 a requirement that many employers offer health insurance. 

The announcement was made late Tuesday by the Treasury Department, at the beginning of the holiday week while Congress was on recess.

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The change in the employer mandate is arguably the most significant concession the administration has made to date.

Employers who don’t provide health insurance will be spared penalties of up to $3,000 per worker until 2015, a one-year delay.

Under Obamacare, companies with at least 50 full-time employees are required to provide qualifying health benefits to workers or face financial penalties called “shared responsibility payments.” The provision of the law aims to shore up and strengthen the system that provides health benefits to most covered Americans. Under regulatory guidance to be published next week, the Obama administration will free companies from this mandate and from rules that they report information about their health benefits to the federal government next year.

“During this 2014 transition period, we strongly encourage employers to maintain or expand health coverage,” Mark Mazur, assistant secretary for tax policy at the Treasury Department, said in a statement. The change does not affect people who will buy health insurance on their own or small businesses that will buy coverage through the law’s health insurance exchanges.

More than half of Americans, 170 million people, are covered by employer-sponsored health insurance, according the census data. Of companies with at least 50 workers, 94 percent already offer health benefits, a survey by the Henry J. Kaiser Family Foundation shows. The one-year delay of the penalties won’t have a meaningful effect on jobs being the leading source of health care coverage, said Paul Fronstin, a senior research associate with the Employee Benefit Research Institute.

“The fact is, employers have been offering coverage voluntarily for how many years now. They didn’t drop it before the law was passed. They offered it for business reasons,” Fronstin said. “I don’t think you’ll see a mass exodus because of this.”

White House senior adviser Valerie Jarrett explained that, on the employer mandate issue, the administration was making two changes. 

“First, we are cutting red tape and simplifying the reporting process,” she wrote on the White House blog. She cited concerns that the law would have required companies to set up new data collection systems on employee access to health care. She said: “Some of this detailed reporting may be unnecessary for businesses that more than meet the minimum standards in the law.” So, she said, the administration plans to figure out a “smarter system.” 

Second, she said, the administration would delay the roll-out and penalties since they were overhauling the reporting system. 

“This allows employers the time to test the new reporting systems and make any necessary adaptations to their health benefits while staying the course toward making health coverage more affordable and accessible for their workers,” she said. 

Randy Johnson, senior vice president of Labor, Immigration, and Employee Benefits at the Chamber of Commerce, told Fox News that with its decision, the administration has “finally recognized the obvious.” 

“Employers need more time and clarification of the rules of the road before implementing the employer mandate,” he said. “We will continue to work to alleviate this and other problems with ObamaCare.” 

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- Writer and Co-Founder of The Global Dispatch, Brandon has been covering news, offering commentary for years, beginning professionally in 2003 on Crazed Fanboy before expanding into other blogs and sites. Appearing on several radio shows, Brandon has hosted Dispatch Radio, written his first novel (The Rise of the Templar) and completed the three years Global University program in Ministerial Studies to be a pastor. To Contact Brandon email [email protected] ATTN: BRANDON

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