Obama administration delays employer insurance mandate

Impact on number of new insured in 2014 undetermined

WASHINGTON — The Obama administration on Tuesday announced a one-year delay on a health reform mandate that mid-size and larger employers provide health coverage or pay a penalty to 2015, according to published reports. 

According to a story in The New York Times, the postponement will not directly affect other central provisions of the law, including the establishment of health insurance exchanges. Neither will it relieve Americans from the responsibility of either having health insurance or paying penalties. 

However it may hinder the administration's efforts to put those provisions into play and has many wondering if Obamacare is built upon a house of cards.

"This step could significantly reduce the number of uninsured people who will gain coverage in 2014," suggested Sara Rosenbaum, a professor of health law and policy at George Washington University, to The Times

However, according to the latest Kaiser Health Tracking Poll conducted in June, the average consumer wants and values health insurance, even young adults between the ages of 18 and 25. As many as 77% in that age group reported that insurance "is very important to them." Almost two-thirds are concerned about paying medical bills for a serious illness or accident and 44% are worried about paying for routine care. 

Estimates of the number of patients gaining coverage as of Jan. 1 2014 have been as high as 30 million and remain a key quotient to the plans many pharmacy operators are making for 2014. As emphasized by Mark Walchirk, president of McKesson U.S. Pharmaceutical, at last week's McKesson ideaShare 2013 conference, a larger population participating in health care courtesy of healthcare reform does more than drive incremental prescription growth — it helps drive outcomes-based medicine. Community pharmacy is well positioned to drive healthcare savings by ensuring patients stay adherent and compliant with their therapies, he said. “Just small increases in adherence and compliance with medications can drive significant growth in the marketplace."

“Today's delay is an admission that ObamaCare is not working," noted Rep. Luke Messer, R-Ind., who last week introduced the Small Business Job Protection Act, H.R. 2577 to provide relief for small businesses from the penalties associated with the Patient Protection and Affordable Care Act’s employer mandate. That legislation is supported by many retailers, including the National Retail Federation and the Retail Industry Leaders Associaton. 

Specifically, the Messer legislation seeks to re-designate a “large employer” for purposes of the employer mandate tax threshold as one with 100 or more full-time equivalent employees, instead of those with 50 or more under current law. The Congressional Budget Office had estimated that penalty payments imposed on businesses that fail to meet this mandate would amount to $130 billion over the next decade. 

“These penalties already are forcing employers to reduce the hours worked by some employees,” noted Messer. “They also deter small businesses from expanding and creating jobs. That is bad for workers, bad for small business owners and bad for our economy. In these tough times, we should be encouraging job growth, not discouraging new jobs with costly new taxes, penalties and regulations."

“Washington needs to focus more attention on the needs of America’s small businesses and entrepreneurs rather than placing additional burdens, mandates and regulations on them," commented David French, NRF SVP government relations, following the introduction of Messer's bill. “Expanding the definition of a ‘large employer’ to 100 employees would protect a wider range of small businesses and retailers and allow them to grow and hire more workers. An employer should never have to choose between hiring an additional employee or paying a penalty."

Whether Messer's legislation gains traction in Congress, mid-size and larger employers will enjoy a reprieve from the insurance penalty until 2015. 

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