Implications of the Obamacare Employer Mandate Delay

by | Last updated Nov 21, 2023 | Published on Oct 15, 2013 | Healthcare News

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The Obamacare Employer Mandate, one of the most vaunted provisions of the Affordable Care Act (ACA), was supposed to come into effect in 2014. The mandate insists that companies with more than 50 full-time employees provide health coverage for their employees by 2014 or face penalties. Bloomberg broke the news last week of the U.S. Treasury Department’s announcement that it is putting off this requirement till 2015.

This delay is expected to serve two aims. First, it will provide the government with more time to consider ways to simplify the new reporting requirements, and second, it will provide businesses with more time to adapt to the upcoming changes in health coverage and reporting systems.

As per latest Census data, around 80 million of people work at firms that must offer insurance. The delay in the implementation of the employer mandate means the uninsured will need to wait another year to get job sponsored health coverage.

The mandate has already impacted employers who are intending to avoid meeting the provisions of Obamacare. As the law considers a person who works 30 hours or more as a week as a full-timer, many businesses have reduced the number of working hours of their employees to 29 hours.

Another trend is that the number of employers who offer health coverage is decreasing every year. According to a survey conducted by McKinsey & Co in 2011, of employers who have a greater understanding of reform implications, more than 30 percent will stop offering health coverage for employees after 2014.

The delay in the implementation of the employer mandate would not affect the individual mandate which requires all Americans to purchase coverage or pay a fine, said the Treasury. It will also not affect the timeline for the implementation of insurance exchanges (both individual and small business). State health-insurance exchanges are to kick off on October 1 this year. The current delay is expected to drive more people towards purchasing subsidized health insurance from the exchanges.

Only people who do not get affordable ESI (employer sponsored insurance) are eligible for federal subsidies when buying insurance on the individual health exchange. However, as the reporting requirement on coverage provided to their employees has been delayed, the government will find it difficult to check whether those who purchase insurance through the exchange are really eligible for subsidies. If subsidies are paid incorrectly, it could prove to be a heavy burden on taxpayers.

Ultimately, the Affordable Care Act is going to extend coverage to millions of Americans who are presently uninsured. Physicians’ offices are going to see a rapid spike in the number of patients seeking treatment. Handling this sudden influx as well as the transition to electronic health records (EHR) would be much easier with professional help from an established medical billing company

Meghann Drella

Meghann Drella possesses a profound understanding of ICD-10-CM and CPT requirements and procedures, actively participating in continuing education to stay abreast of any industry changes.

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