Employer Mandate is Delayed

One important piece of the health reform law, the employer mandate, has been delayed until 2015.  This provision requires larger employers to provide health insurance coverage for their employees or pay penalties.

Opinions about this provision vary widely.

  • Sara Rosenbaum, a professor of health law and policy at George Washington University: “I am utterly astounded.  It boggles the mind. This step could significantly reduce the number of uninsured people who will gain coverage in 2014.”
  • Randy Johnson, U.S. Chamber of Commerce: “The administration has finally recognized the obvious — employers need more time and clarification of the rules of the road before implementing the employer mandate.”
  • Ezra Klein, Washington Post. “Delaying Obamacare’s employer mandate is the right thing to do. Frankly, eliminating it — or at least utterly overhauling it — is probably the right thing to do. But the administration executing a regulatory end-run around Congress is not the right way to do it.”  Tyler Cowen agrees.

I tend to side with Ezra Klein on this policy.  The Center of Budget and Policy Priorities justifies the elimination of the employer mandate in its current form as follows:

  • By imposing a tax on employers for hiring people from low- and moderate-income families who would qualify for subsidies in the new health insurance exchanges, it would discourage firms from hiring such individuals and would favor the hiring — for the same jobs — of people who don’t qualify for subsidies (primarily people from families at higher income levels).
  • In particular, it could make it more difficult for low-income parents with children to be hired. Whether an individual qualifies for a subsidy in the exchange depends on whether the income of the worker’s family falls below the income limit for a subsidy, and those income limits appropriately rise with family size. Hence, an individual with children…is much more likely to receive a subsidy than a single individual with the same income.
  • It would provide an incentive for employers to convert full-time workers (i.e., workers employed at least 30 hours per week) to part-time workers.
  • It would place significant new administrative burdens and costs on employers.


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