Delay buys time for employers to set up plans
Cox News Service | July 05,2013
President Barack Obama gestures during a statement about the Affordable Care Act on Friday in San Jose, Calif.
DAYTON, Ohio — The decision this week by the Obama administration to delay a controversial mandate that small employers provide health insurance or pay a penalty offered a much-needed reprieve to employers still struggling to come to grips with the law.
But the provisions of the law have not changed.
The vast majority of the estimated 1.5 million uninsured Ohioans, who will be required to sign up for health care coverage under the Affordable Care Act, will have access to subsidized health coverage through online health exchanges next year, according to the U.S. Department of Health and Human Services.
Enrollment in the exchanges begins Oct. 1, and will be open to employees who work for companies, such as restaurants, hotels and temporary staffing companies, that now do not offer health insurance until 2015.
“If you don’t have insurance and your company doesn’t provide it, you as an individual will still have to sign up for insurance or pay a penalty next year unless you are exempted,” said Amy Rohling McGee, president of the Health Policy Institute of Ohio. She noted that people with incomes so low that they are not required to pay taxes would be exempted from the law.
John Bowblis, a Miami University health economist, said the decision to delay the employer mandate simply gives employers more time to comply with the health care law and its complex reporting requirements.
“This tells you how complex the law actually is,” he said. “There are so many moving parts that it’s extremely difficult to implement the law, and the government bureaucracy didn’t give itself enough time to figure it out and communicate to employers the guidelines they need to follow to comply with the law.
“I don’t see this as being politically motivated in one way or the other, but you can see both sides using it to make political arguments for or against the legislation,” he said.
Indeed, Ohio lawmakers and state officials who challenged the constitutionality of the health care law — before it was upheld by the Supreme Court — used the decision to delay the employer mandate to vent their frustrations with the law, derisively referred to as Obamacare.
“Any relief that job creators can receive from Obamacare’s employer mandate is welcome news; hopefully repealing the mandate altogether is the next step because it is so burdensome on job creators,” said Ohio Lt. Governor Mary Taylor, who also is responsible for approving health plans submitted for Ohio’s health exchange as director of the state Department of Insurance.
The employer mandate requires companies with 50 or more employees working 30 or more hours a week to offer coverage or face fines. It remains controversial and has prompted some employers to say they had to cut workers’ hours to avoid the mandate and penalties that range from $2,000 to $3,000 per employee.
But the mandate is only a small part of the ACA’s overall expansion of health coverage.
At least 95 percent of employers subject to the mandate already provide health benefits, according to the Kaiser Family Foundation.
That figure was not expected to change next year even with the mandate, according to the Congressional Budget Office, which said the mandate penalty would not raise any significant revenue for the federal government.
Even those firms that offer health insurance to about 60 percent of Ohio workers have been scrambling to prepare for the implementation of the law and trying to assess the impact the changes will have on health plan enrollment and costs.
Under the law, workers can only be charged up to 9.5 percent of their income for insurance premiums, shifting more of the cost burden to the employers.
In addition, beginning in 2018 employers will be subject to a 40 percent excise tax on plans that cost the company $10,200 per individual employee and $27,500 for families — a so-called Cadillac tax.
“We share the cost of coverage with our employees, and of course we’re concerned about what’s going to happen with health care,” said Dave Dysinger, president of the Dayton-based precision machine business Dysinger Inc. “This gives us a little more time to let things play out and to see what the impact is going to be.
“We have a committee that looks at that,” he said. “Frankly, I couldn’t tell you. The truth is my hands are full just trying to run a business.”
Dysinger’s not alone.
A national survey of nearly 900 employers released last month by the health care consulting firm Mercer found that 32 percent of employers knew little about the actual cost impacts of the new changes resulting from the ACA.
In addition, about a fourth of employers (23 percent) were still unsure of how they would track and record the hours of employees who work variable hours, as is required by the law to verify that all full-time employees are offered coverage.
Meanwhile, 78 percent of those surveyed said they were concerned about the communication requirements associated with the new law, such as educating employees about their choices and supporting informed decision-making.
Regardless of the uncertainty, Dysinger said he plans to hire a handful of new employees this year and continue to offer health insurance.
“I’m not going to hold my company back in fear,” he said. “The fact is that the law is in place, and in may be a bad plan, but at least it’s forcing people to come to the table and look for solutions or improvements in providing health care.”