Health IT

Reactions to employer mandate delay: What’s the implication for health insurance exchanges?

calendar, date, timeThe Obama Administration’s move to delay the employer mandate by a year until 2015 has led to a lot of speculation in the Twittersphere and blogosphere. With such a complex law with so many moving parts, there were always going to be changes, it was just a question of when and how much.

Does this signal the beginning of the end of employer-provided insurance? Will it mean more people turning to the health insurance exchanges, set to go live in October,  sooner rather than later? How will these exchanges cope if many more people need to begin using them sooner rather than later, when they are still works in progress. Will delaying the political fallout of the employer mandate until after the 2014 midterm elections save more Congressional seats for Democrats?

Mark Mazur kicked things off on the Treasury Department blog after the delay was initially reported by Bloomberg.

“We have heard concerns about the complexity of the requirements and the need for more time to implement them effectively.  We recognize that the vast majority of businesses that will need to do this reporting already provide health insurance to their workers, and we want to make sure it is easy for others to do so.  We have listened to your feedback.  And we are taking action.”

Both sides of the decision were reflected in some of the tweets.


The employer mandate is bad policy and should be eliminated. But the unilateral way the WH is doing it isn’t good.

Jared Bernstein, a senior fellow at the Center for Budget and Policy Priorities likened the widespread reaction on Twitter to so much sound and fury on The New York Times blog, Economix.

“I think it’s an unfortunate delay of an important but relatively small piece of the bill, more growing pains of the type I’m sure Medicare had when it got going than anything existential. But that’s not how it will play in the hurly-burly of the next few days of Washington politics.”

Avik Roy, a blogger with Forbes, suggested that the delay in implementing the employer mandate would ultimately lead more companies to dump insurance and predicted health insurance exchanges would get more customers:

“In the short term, the delay will have several effects. First, the mandate drives up the cost of labor, and therefore increases unemployment; delaying the mandate by one year may modestly mitigate that disincentive. Most importantly, the delay of the mandate means that more people will want to enroll in Obamacare’s subsidized insurance exchanges. Every year, fewer and fewer employers offer health coverage; given one more year to restructure their workforces, this process could accelerate.”

Douglas Holtz Eakin, American Action Forum pointed out that it would cause uncertainty about insurance coverage  “Viewed from a health insurance perspective, the implications are mixed. For some, it may well be the case that the new, exchange-based insurance is a better combination of coverage and cost. But it will come at the cost of even greater churning in insurance coverage – which translates into switching provider networks and interrupting health care. (The laughing you hear in the background is those remembering the president’s promise that “if you like your insurance, you can keep it.”)

Tim Holz on Health Affairs Blog wondered if it would mean other aspects of the Affordable Care Act would change and what would be the unintended consequences of the delay.

“One has to hope, however, that the Administration has thought through the ramifications of this delay for the other provisions of the ACA. The statements say that implementation of the rest of the ACA, including the availability of premium tax credits, is going forward on schedule….If employers have no obligation to report coverage, how will the exchanges or the IRS verify claims that coverage is unaffordable or inadequate?  Could this potentially mean that many more individuals will become eligible for premium tax credits, either because their employers drop or do not expand coverage, or fail to respond to requests to verify coverage?”

A Los Angeles Times editorial by Jon Healy said it presented an opportunity for big organizations such as the NBA and NFL to back a public education campaign to ensure that enough young people buy insurance

“The biggest potential problem, though, is a lack of awareness or understanding of what will be available in 2014, when the new law’s main provisions go into effect. Without a broad public education campaign, too few of the younger, healthier people who are eligible for premium subsidies will learn that they’re available or understand how the subsidies change the value proposition for them.”

 [Photo from stock.xchng user malko]

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