Employer Mandate Component of ObamaCare Delayed Yet Again

The Treasury Department announced on Monday that the employer mandate component of ObamaCare would be delayed another year for some companies.

The employer mandate requires that employers who have more than 50 full-time employees must provide those employees at least a minimum level of medical insurance coverage.  Failure to provide that coverage would result in hefty fines for the employers.

ObamaCare originally called for the employer mandate to go into effect in 2014.  However, the employer mandate was delayed previously until 2015.

With the announcement of a further delay on Monday by the Treasury Department, employers with 50 to 99 employees do not have to provide insurance coverage for full-time employees until 2016.  Employees with 100 or more employees must now provide insurance coverage for only 70 percent of their employees by 2015 and at least 95 percent of their employees by 2016.

Although this change applies to a relatively small number of employers, it will affect the insurance coverage options available for millions of individuals and families.

ObamaCare Delay Renews Calls to Repeal Law Entirely

The delays to the employer mandate have been made in large part at the urging of businesses, which are struggling to implement the required coverage because of the costs and complexities involved.  As a result, the announcement was met quickly by Republican lawmakers, who have long opposed ObamaCare and who have increasing reason to call for repeal of the law entirely as businesses and individuals struggle to abide by its requirements.

“Once again, the president is giving a break to corporations while individuals and families are still stuck under the mandates of his health care law,” said House Speaker John Boehner.  “And, once again, the president is rewriting law on a whim.  If the administration doesn’t believe employers can manage the burden of the law, how can struggling families be expected to?”

In addition, the delay is likely to mean increased costs for taxpayers as well.  If companies are allowed to wait longer to provide insurance coverage to their employees, those individuals who want insurance coverage must seek it on their own through insurance exchanges.  This will increase the number of individuals who apply for and receive subsidies to help them pay for their insurance, a cost that taxpayers will be required to bare.

Republican Senator John Barrasso of Wyoming, Republican Senator Tom Coburn of Oklahoma, and several other Republican congressional representatives wrote a letter to John Koskinen, the new IRS Commissioner, asking him to clarify the individual mandate under ObamaCare in light of the changes to the employer mandate.

“Given a number of last-minute administrative ‘adjustments’ made by the Administration, there is some understandable confusion and concern about the enforcement of the individual mandate tax,” wrote the senators.  “With the Administration’s decision to waive, delay, or unilaterally alter some provisions of the law, including the employer mandate tax on businesses, taxpayers deserve clarification on how the agency intends to enforce the individual mandate tax.”

The individual mandate requires that individuals obtain insurance coverage or pay a penalty.  In the initial years under ObamaCare, many individuals are already opting to pay the penalty, because it is far less expensive than the premiums for insurance coverage.

However, with the change to the employer mandate, there is the expectation that some individuals who were planning to obtain insurance from their employer will no longer have that option, nor will they be able to qualify for subsidies to make insurance purchased through an exchange affordable.

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by Mark Johnston

Mark has been a contributor to legal web sites related to bankruptcy, tax, and criminal law since 2011. He has an Accounting degree from Texas A&M University.