The Employer Mandate Delay – Who Wins and Who Loses?

Summary: Do you know about the employer mandate delay? Who are the winners and losers of the employer mandate? What was the reason for the delay? Who isn’t affected positively or negatively?

The employer mandate, which was to go into effect as of January 1, 2014, has been delayed for one year. The mandate requires employers with more than 50 employees to provide insurance coverage for their employees or face a penalty, initially $2,000 for each uninsured employee. An employee is defined as working at least 30 hours per week under healthcare reform, so these penalties could be quite substantial for larger companies. The delay is an answer to businesses that stated they needed more time to get their ducks in a row and comply with the new, complex reporting requirements.

Who Stands to Gain by Postponing the Employer Mandate?

• Democratic candidates — postponing gives an advantage to Democratic candidates, as the mandates are pretty much removed from the table as a hot topic during a Congressional election year.
• Republicans — postponing by a year lends weight to the argument that healthcare reform isn’t the answer, and may prompt a renewed attempt to repeal the Act.
• Employees — employers had begun gearing up for the mandates by cutting some workers’ hours to below 30 to reduce the penalty, and by laying others off in an attempt to reduce or eliminate penalties, depending on the size of the organization.
• Job hunters — the potential reduction in force mentioned above may mean additional jobs over the next year.

Who Stands to Lose by Postponing the Employer Mandate?

• Uninsured people employed by medium or large organizations — the mandate is still in effect for all Americans to be insured. Many employees were counting on obtaining health coverage through their employer and now may be forced to obtain insurance through the exchanges. The delayed mandate just adds to the confusion surrounding healthcare reform, and the individual mandate in particular.

Who Shouldn’t Be Affected One Way or the Other?

The short answer is the majority of the population. More specifically, this includes:

• Anyone who already has insurance through their employer
• Anyone who currently has Medicare or Medicaid
• Anyone working for a company with fewer than 50 employees
• Anyone covered under private insurance

The mandates, taxes, and penalties are a major focal point of healthcare reform, both from the employer side and in the individual mandate. The delay of this critical piece will more than likely widen the disconnect that already exists between the two major political parties. It seems to be a win for Democrats in terms of the Congressional election year, and a win for Republicans in terms of poking holes in the validity of healthcare reform. The next few months should be interesting, as we see how this plays out and whether there will be any delays to either the healthcare exchanges or the individual mandate.

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About BHM Healthcare Solutions

BHM is a healthcare management consulting firm whose specialty is optimizing profitability while improving care in a variety of healthcare settings. BHM has worked both nationally and internationally with managed care organizations, providers, hospitals, and insurers. In addition, BHM offers a wide breadth of services, including managed care consulting, strategic planning and organizational analysis, accreditation consulting, healthcare financial analysis, physician advisor/peer review, and organizational development.

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