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By Rich Ehisen
Faced with growing complaints from employers over the complexity of implementing the Affordable Care Act by next January, the Obama administration on July 2 announced it would postpone for one year enforcement of a provision of the law that requires large employers, those with 50 or more workers, to offer those employees health coverage or face fines. The new deadline is now January 1, 2015. The unexpected decision was lauded in the business community. U.S. Chamber of Commerce Senior Vice President Randy Johnson characterized the views of many business advocates, telling Bloomberg that "the administration has finally recognized the obvious — employers need more time and clarification of the rules of the road before implementing the employer mandate." Micah Weinberg, a consultant for the Bay Area Council, a San Francisco-based pro-business group that supports the ACA, said that assertion "is absolutely true." He says the most profoundly impacted businesses are not the larger ones the law already applies to, but those with employee numbers close to the 50-worker threshold who are looking to grow. "Most very large businesses are already in compliance," he says. "But for smaller firms, that portion of the law is an order of magnitude more complicated than any other portion of it." Even so, the announcement took many observers off guard. But while the delay was surprising, the political hue and cry it incited from both the law's opponents and its supporters was not, with the former claiming it as proof that the ACA is fatally flawed and the latter downplaying the delay as merely a common sense adjustment that would make the law's eventual full implementation easier on everyone. Republicans were also quick to note that the new deadline falls after the 2014 Congressional elections, ostensibly removing it as an issue and offering some protection for vulnerable Democrats who support the law. But some ACA supporters were unhappy with the delay too. They contend it will confuse many consumers — who might think the entire law has been delayed. Rich Umbdenstock, president of the Chicago-based American Hospitals Association, implied in a statement that the delay could also erode public trust in the measure. "The goal of the ACA was to extend coverage to the uninsured, which required a shared responsibility from all stakeholders," he said. "We are concerned that the delay further erodes the coverage that was envisioned." The delay has also given energy to ongoing efforts by Congressional Republicans to repeal the law. While that remains highly unlikely, the Washington Post reports House Republicans have already started a push to demand a repeal of the ACA's other critical tenet: the individual mandate to buy health coverage. According to the Post, House Speaker John Boehner (R-Ohio) rallied his troops last week at a closed door meeting, telling them, "Is it fair for the president of the United States to give American businesses an exemption from his health care law's mandates without giving the same exemption to the rest of America? Hell no, it's not fair." The Speaker has vowed multiple votes on the issue this month, one to codify the employer mandate delay and another to grant the same stay for individuals. While this is tasty red meat for the Republican base, it's not going to produce a wholesale repeal: the White House has made it clear it will not entertain any delay of the individual mandate. White House spokesperson Jay Carney said that critics are being "willfully ignorant about past precedent" in implementing complex laws such as the ACA. While the partisan warriors garner copious amounts of media attention doing battle over the employer mandate, much less attention has been paid to other ACA changes the Obama administration quietly announced just days later, on July 5. And while the employer mandate affects only a relatively small number of companies — statistics show that 94 percent of employers with 50 to 199 workers already provide health coverage for their workers, a figure that climbs to 98 percent for companies with 200 or more — these alterations could potentially impact many states. First, the administration decided that for the first year of their operation, the 17 state-run health benefits exchanges (including the District of Columbia's) will not have to verify enrollees' claims that their employer does not offer health coverage or that it is too pricey (more than 9.5 percent of employee income). The federal government was initially supposed to do this verification for the exchanges, but has determined it does not have the manpower to do so. Rather than sticking state exchanges with the task during their startup phase, the feds are going to just let it slide until 2015. Even then, the checks will be done via random sampling rather than comprehensive checking. The administration is also streamlining its original plan to back-check any applicants who report income that is 10 percent less than what federal data showed them making in the previous year, the idea being to ensure folks don't use ginned up income figures to game the system and receive federal subsidies they do not qualify for. The exchanges will still have to verify incomes, but for 2014 only they will have to accept applicants' numbers if no other electronic figures are available. If so, however, they will also have to review a random sampling of similar cases. (Finally, states will also be given until 2015 to begin electronically disseminating information about Medicaid benefits to recipients of those services. The toxic political back and forth surrounding the ACA is not going away any time soon. But within all the self-serving rhetoric, there really is a major issue at stake in the large-employer debate. While, as noted above, the vast majority of large employers already provide their workers with health coverage, around 10,000 don't. As such, many critics note that in 2014 taxpayers are picking up the tab for their workers whose health care is subsidized through an exchange or Medicaid, which not only alleviates an expense but gives them a competitive edge over employers who do offer insurance. But others note this could also be a conduit to a broadening of another conversation, one that focuses on whether it is wise to continue focusing so much time, energy and money on continuing the practice of employer-provided insurance in the first place. Others also note that the real deadline to be concerned with is fast approaching: the Oct. 1 opening of enrollment for both state- and federally-run health exchanges. States have been frantically racing to be ready to begin enrollment on that date, but a report issued last month by the Government Accountability Office suggests most states have failed to complete myriad tasks associated with running the exchanges, from IT management to choosing which plans will be sold through the exchange. Should a number not be able to start on time, the push to also move the individual mandate back could gain real support outside of GOP circles. California Secretary of Health and Human Services Diana Dooley has heard all of the rumblings, and concedes the Golden State — the first to begin work on a state-run exchange — may not be ready to go the first day of October, though she says any delay will be short. She says more course corrections are also likely to come and hopes people will be patient. "It is far more complicated to change an existing system than it is to create one from whole cloth the way we did with Medicare and Medicaid," she says. That is undoubtedly true. In the meantime, the headwind the ACA has been sailing into is still manageable. But another round of missed deadlines or forced changes could turn that headwind into a gale.
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