July 9, 2013
Implementation of the Affordable Care Act (aka Obamacare) made an interesting adjustment this week, as the large-employer mandate was set aside until 2015.
No longer must large employers face the “play or pay” decision in 2014—they may have been given a free pass to continue business as usual, for now. Did employer criticisms manage to overwhelm the administration, or is a crafty move going on behind the scenes?
And what does it all mean for attorneys?
In order to evaluate what has happened, it is helpful to think about the significance and purpose of the employer mandate.
The mandate requires that employers provide group coverage of a certain type or pay a penalty. New notice and reporting requirements also go with the mandate.
There are a variety of reasons for employers to offer group health benefits. It was recently argued that these benefits help employers attract and retain employees, which seems a reasonable part of the answer. But employers are now engaging in widespread reductions in coverage, and increasing employee out-of-pocket expenses; how is this to be reconciled with efforts to attract and retain employees?
So there seems to be another factor at play. Perhaps large employers find it in their interests to offer health insurance — so that by remaining a major source of funding for the Health Care System, they add to their influence throughout the economy.
If this is the situation, then the only real purpose of the employer mandate is to set a minimum floor for employer coverage that matches the floor for individual and small-business policies to be sold through the Exchanges.
Complaints about the ACA might then arise from unliked program details, like new minimum coverage requirements and paperwork. Postponing of the mandate thus may be seen as a push-back against specific restrictions on the type of coverage to be offered, while not really threatening large-employer participation in the Plan.
If this is so, why would the administration buy into a postponement?
Perhaps the answer is that many of the details of the coverage and reporting requirements still remain to be worked out, so that it makes sense to peel away this portion of the Plan for now. It may be presumed that employers will mostly continue to offer group insurance, for their own purposes, and thus will not threaten the ACA in a fundamental way.
If this is so, we may have a mutual agreement at work: employers get temporary relief from some changes that they are not ready to make, while the administration gets temporary relief from implementation requirements that are burdensome.
Perhaps the result is a win-win.
And how about attorneys? They also win, since more turmoil in Obamacare creates the need for more skilled legal advice. All organizations will now need to adjust to this sudden change — and prepare themselves for the possibility of more change to come.
This is #2 in a series of weekly Obamacare Reports. More on these topics may be found in a recent book by the authors.