Obama Administration Announces One-Year Delay in Obamacare Employer Mandate

July 3, 2013

Late yesterday, the Assistant Treasury Secretary for Tax Policy announced:

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.

Thus, while the employer mandate will be law in 2014, the government won't be enforcing the penalties on it.

The employer mandate is NOT the individual mandate, which is still scheduled to go into effect on January 1, 2014. The employer mandate requires all employers with at least 50 full-time employees to offer health insurance or pay a penalty. Assailed by left and right for bad design, added paperwork, and perverse incentives (employers have an incentive to find ways to get below the threshold), the Administration's decision has already received positive attention. However, I wonder whether the Executive Branch really wants to set the precedent that the Administration can simply announce that they won't enforce an entire section of Obamacare, with no congressional action required.

Our former colleague Josh Barro speculates that the Administration is trying to get out of ever having to enforce the employer mandate, and the Washington Post editorial board applauds the delay and urges significant reworking. Be sure to check out those two pieces for more.


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