When President Obama signed the Affordable Care Act, its
requirement that large employers provide health coverage or pay a penalty
seemed to many supporters a key pillar of the effort to guarantee health
coverage to Americans. Four years later and after repeated delays, the employer
mandate has become something of an orphan, reviled by the law's opponents and
increasingly seen as unnecessary by many of its supporters.
Twice in the last two years, the Obama administration has
put off the penalties, citing difficulties enforcing the mandate. House
Republicans plan to sue the president, largely over his suspension of the
mandate, saying he has broken the law by failing to enforce a requirement that
they bitterly oppose. The House could vote to approve the lawsuit as early as
The employer mandate is designed to prevent businesses from
dropping health benefits now that the government provides subsidies to help
low- and moderate-income Americans buy coverage. Large employers that do not provide insurance
are supposed to pay a fine — called an employer responsibility payment — of
$2,000 per employee above the first 30 employees. Employers may be subject to
even bigger fines if their employees cannot afford the coverage offered at work
and then qualify for government subsidies to buy coverage on their own.
But over time, the mandate has drawn increasing criticism,
even from the law's supporters. Support for the employer mandate has faded in
part because employers have continued to offer benefits, even without a
penalty. In fact, recent surveys have suggested that there has been a gain in
employer-based insurance this year.
The institute recently concluded in a study that dropping
the mandate would have a minimal effect on insurance coverage nationally. Health
law supporters nonetheless caution against scrapping the mandate altogether,
noting that it may become a more important tool if more employers drop coverage
or if workers can't find affordable insurance on their own. There is little
chance, however, that the employer mandate will be repealed any time soon.
The mandate directly affects only a small slice of
Americans. The health law has always exempted businesses with fewer than 50
full-time employees, which accounts for about a quarter of the U.S. workforce. The
vast majority of larger businesses already provide coverage: 99% of employers
with more than 200 workers offer health benefits, according to an annual survey
by the nonprofit Kaiser Family Foundation and the Health Research &
Educational Trust. But the additional reporting requirements integral to the
mandate have made it deeply unpopular with business groups.
Even supporters of the law acknowledge that because the
requirement applies only to employers with 50 or more full-time workers, it
creates an incentive for employers to move some people to part-time work.
Neither the president nor Senate Democratic leaders have
signaled any interest in reopening debate about the provision. Unless the Obama
administration delays them further, the penalties are scheduled to go into
effect next year on employers with more than 100 workers. The administration
plans to impose penalties on employers with more than 50 full-time workers
beginning in 2016.
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