New Year, New Employer Mandate

January 2, 2015

Happy New Year from the Affordable Care Act (yes, again!)

As the ball dropped to mark the beginning of the New Year, another piece of the Affordable Care Act went into effect: the employer mandate. Through an incredibly complex system of rules, the IRS may penalize certain employers for not offering sufficient health insurance to employees.

The IRS has issued a truly epic 56-question FAQ to help explain the even-more-epic final regulations for the employer shared responsibility provision. In case you are wondering, those final regulations total to over seventy thousand words – similar in size to the novel Harry Potter and the Sorcerer’s Stone.

I am going to go ahead and say that if you’re choosing between the two of these for reading material, you should probably opt for J.K. Rowling’s debut novel. It is a literally-magical tale about friendship, growing up, and wizardry as a metaphor for the limitless potential of youth and imagination. In contrast, the IRS regulations are about tax penalties.

Fortunately, the main points from the employer mandate have been further distilled by some great organizations that help guide Americans through the increasingly-complex world of taxes and health insurance. The Kaiser Family Foundation, especially, has done a good job of putting the basics of the rule into a flowchart.

All jokes aside, the employer mandate is not a particularly well-thought-out public policy. All in all, it is expected to result in only 200,000 additional people gaining coverage. Policy analysts across the political spectrum think it is an awful cost-benefit proposition. The Urban Institute asks, in all seriousness, why not just eliminate it? The Manhattan Institute names its elimination as a top economic priority for 2015.

The policy is especially questionable given its complexity, given its administrative costs, and given that its purpose appears to flatly contradict the purposes of other parts of the Affordable Care Act. It should go.

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