Another part of the Affordable Care Act delayed for a year

Daily News Article   —   Posted on February 12, 2014

(by Kelly Kennedy, USA Today) WASHINGTON – The Obama administration Monday announced another delay in the implementation of the requirement (mandate) that employers provide health insurance for their employees.

Businesses with more than 50 employees but fewer than 100 will have an extra year to phase in health care coverage of employees who work more than 30 hours a week, Treasury Department officials said. (The mandate for employers with more than 100 employers had already been delayed one year to January 2015.)

Republicans, many of whom co-sponsored a bill asking that the employer mandate be delayed until 2015, immediately denounced the move and called for the delay to be extended to individuals. Anyone who does not sign up for health insurance in 2014 is subject to a fee at tax time. In 2014, that fee is 1% of annual household income or $95 per person [whichever is greater], and $47.50 per child. It increases every year.

House Majority Leader Eric Cantor, R-Va., said the president “selectively delays” parts of the law to avoid negative consequences. “Much like the individual mandate, the business mandate is bad for middle-class families and will harm economic growth, but the answer to this problem is not random unilateral changes, stoking uncertainty,” Cantor said. …

The delay announced last July [for employers with 100 employees or more] fueled calls from the law’s Republican opponents that the entire law needed to be delayed or repealed, which President Obama and congressional Democrats refused to do. The federal and state exchanges where people can buy health insurance opened on time Oct. 1 but were immediately plagued by outages and glitches that slowed enrollment to a crawl until the site was fixed Nov. 30. Since then, more than 3 million have bought insurance through the exchanges [less than half the 7 million the Obama administration had said would sign up by March 2014].

The new rule gives employers [with 50-99 employees] more time to expand coverage or to provide health insurance if they have never done so before. Those who do not have insurance through their employers may sign up for health insurance at the HealthCare .gov. Most Americans who make less than 400% of the federal poverty level, or $94,200 for a family of four, are eligible for subsidies to help pay for insurance. Officials say about 2% of businesses have between 50 and 99 employees. About 96% of businesses have fewer than 50 employees.

Businesses with more than 100 employees must offer coverage to 70% of their full-time employees in 2015 and 95% of their employees in 2016.

Employers will need to certify on a form that they did not drop employees to avoid providing coverage. …

Businesses with more than 50 employees would have paid a fee of $2,000 per uninsured employee after the first 30 employees, as well as a fee for employees who receive a subsidy through the exchanges. This comes at a cost to the government: The Congressional Budget Office expected such penalties to bring in $4 billion in 2014, and the new delay causes two years’ worth of lost funds. …

Businesses were also glad that the guidance came out early in the year, giving them time to make changes, she said.

“The issue that is still controversial is defining an employee as 30 hours or more,” she said, though it helps that the rule allows employers to average hours over a 12-month time period. Some retailers worried that hours worked during the holidays shouldn’t count if those hours are different from normal working hours.

Companies with fewer than 50 full-time workers are already exempt from the rule. …

(The Wall Street Journal reports that the health care is expected to be a central issue in the November midterm elections.)

Reprinted here for educational purposes only. May not be reproduced on other websites without permission from USA Today. Visit the website at usatoday .com.

Background

The Wall Street Journal reports:

The new rules for companies with 50 to 99 workers would cover about 2% of all U.S. businesses, which include 7% of workers, [almost 8 million people].

The rules for companies with 100 or more workers affect another 2% of businesses, which employ more than 74 million people.

Most large employers offer coverage to their workers, though not all employees accept it, and some companies exclude blocs of workers. Many of the companies that don't cover workers are lower-wage, smaller employers concentrated in the hospitality, retail and agriculture sectors. Some of them have begun trimming workers' hours to reduce firms' exposure to penalties.

Approximately 96% of employers are small businesses and have fewer than 50 workers and are exempt from the employer mandate. ...

Monday's announcement of fresh changes comes as the administration weighs how much of the law to adjust in the wake of its troubled rollout. Health care is expected to be a central issue in the November midterm elections. (from wsj.com)