The most concerning aspect about the Obama administration’s decision to delay the employer mandate is the justification for the delay. The Treasury Department is basically claiming that the reporting system they originally created to try to make the poorly designed mandate work is incredibly burdensome. From the Treasury:
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.
Here is some additional detail. The ACA includes information reporting (under section 6055) by insurers, self-insuring employers, and other parties that provide health coverage. It also requires information reporting (under section 6056) by certain employers with respect to the health coverage offered to their full-time employees. We expect to publish proposed rules implementing these provisions this summer, after a dialogue with stakeholders – including those responsible employers that already provide their full-time work force with coverage far exceeding the minimum employer shared responsibility requirements – in an effort to minimize the reporting, consistent with effective implementation of the law.
This does beg the question: if you haven’t figured out how to make it work yet, how will another year will help?
It is not like the implementation process was rushed. It was one of the longest ones for a piece of legislation ever. The administration had four years to work out the kinks but still haven’t.
The other major provisions the administration has previously delayed, the SHOP exchanges and the Basic Health Plan, were at least not core to the basic structure of the law. As quasi-standalone programs it is possibly justifiable to ignore them in order to focus all the limited resources on the core structural elements.
The employer mandate is different. It is a core part of the basic structure of the law. It was meant to expand coverage by getting more people covered at work and to prevent a possible death spiral on the new exchanges with companies dumping the sickest employees. It is necessary to make the system work as advertised. The administration should have been heavily focused on getting it ready. It should have been a top priority.
The fact that after three years they haven’t figured out how to make it work well is worrying. The problem might not be with their previous plan to implement this provision but that the very poorly designed employer mandate is unworkable.