The two officials, who asked not to be identified to discuss the move ahead of its announcement, said the administration decided to wait until 2015 before enforcing the employer mandate in order to simplify reporting requirements and give businesses more time to adapt their health-care coverage.
The 2010 Patient Protection and Affordable Care Act includes financial penalties on businesses with more than 50 employees that fail to provide health insurance that meets minimum standards and tests for affordability.
The White House had been in discussions with business groups over complaints about the reporting requirements, and senior officials believe they can simplify the process, the officials said. President Barack Obama’s administration plans to invite employer groups to discuss ways of simplifying administrative burdens created by the mandate, they said.
So how will this work if a person’s employer won’t provide insurance? The employee will then be stuck with buying his or her own insurance, or have to pay the mandate? There was a reason all of this was supposed to go into effect at once.
Update: Here is a Treasury blog post:
The Administration is announcing that it will provide an additional year before the ACA mandatory employer and insurer reporting requirements begin. This is designed to meet two goals. First, it will allow us to consider ways to simplify the new reporting requirements consistent with the law. Second, it will provide time to adapt health coverage and reporting systems while employers are moving toward making health coverage affordable and accessible for their employees. Within the next week, we will publish formal guidance describing this transition. Just like the Administration’s effort to turn the initial 21-page application for health insurance into a three-page application, we are working hard to adapt and to be flexible about reporting requirements as we implement the law.
We recognize that this transition relief will make it impractical to determine which employers owe shared responsibility payments (under section 4980H) for 2014. Accordingly, we are extending this transition relief to the employer shared responsibility payments. These payments will not apply for 2014. Any employer shared responsibility payments will not apply until 2015.
During this 2014 transition period, we strongly encourage employers to maintain or expand health coverage. Also, our actions today do not affect employees’ access to the premium tax credits available under the ACA (nor any other provision of the ACA).
Of course, those tax credits are still pending litigation in D.D.C. in non-exchange states.
Update: Some thoughts from Phillip Klein:
To start, the purpose of imposing a $2,000 (or $3,000) penalty per worker on businesses with over 50 employees which did not offer acceptable health coverage was to discourage businesses from dropping coverage in response to the health care law and dumping their workers on new government-run exchanges. But absent that penalty, will more businesses now be motivated to drop their current coverage?
Also, the delay is said to be one year, but if business lobbyists were successful in convincing the Obama administration to delay it for a year, will it actually ever go into effect? Congress routinely votes to delay scheduled cuts in physician payments under Medicare. Will this be the same sort of policy, that exists on paper, but never gets implemented?
Politically, the decision smacks of the Obama administration wanting to defer the impact of the law on businesses during the 2014 midterm election year, avoiding headlines about businesses cutting staff levels or reducing worker hours to get around the mandate. But it could also be politically dangerous, by reinforcing the idea that the law is a looming train wreck. Republicans can now also run on an argument that if voters elect them, they’ll prevent this horrible policy — so horrible that even the Obama administration had to delay it for a year — from ever going into effect.
Update: A potential silver lining from Avik Roy:
Even if the delay lasts for one year, that delay will give firms time to restructure their businesses to avoid offering costly coverage, leading to an expansion of the individual insurance market and a shrinkage of the employer-sponsored market. Remember that the administration is notdelaying the individual mandate, which requires most Americans to buy health coverage or face a fine.
But delaying the employer mandate could lead, ultimately, to its repeal, which would do much to transition our insurance market from an employer-sponsored one to an individually-purchased one. Indeed, earlier this year, abill to do just that was introduced by Rep. Charles Boustany (R., La.) and Sen. Orrin Hatch (R., Utah). If the employer mandate were to ultimately be repealed, or never implemented, today’s news may turn out to be one of the most significant developments in health care policy in recent memory.