Industry reacts to employer mandate delay
July 3, 2013 4:32 PM
EBN asked industry leaders for their thoughts on the employer mandate delay. Here's what they had to say.
Alden Bianchi, member, Mintz, Levin, Cohn, Glovsky and Popeo, P.C.
Ill be the first to confess that I was shocked by the Administrations announcement delaying for one year the enforcement of the Affordable Care Acts employer shared responsibility rules. It would not have surprised me in the least if the Treasury Department and IRS announced a more lenient enforcement standard similar to that adopted with respect other provisions of the law. But a wholesale, unqualified delay did not appear to me to be in the cards.
That said, I think the administration did the right thing. These rules are ghastly in their complexity. To date, the regulators have done an exemplary job in fashioning rules that are generally fair and administrable. The delay will give them time to take a considered approach and to integrate the views of stakeholders. It will also give employers or at least those savvy enough to use it wisely time to understand and navigate all aspects of health care reform.
Helen Darling, president and CEO, National Business Group on Health
The delay will most likely have the greatest effect on employers in industries with large numbers of part-time workers and with workforces whose hours fluctuate including retail, hospitality, entertainment. agriculture and restaurants. These employers were gearing up for hard decisions about not only health benefits, but also staffing. Now they will have more time to make those decisions.
Timothy J. Finnell, founder, Group Benefits LLC
Saying the news was unexpected, Finnell notes that it calls into question what will happen to all of the other pieces of Obamacare that are set to go into effect. We are now waiting for another shoe to drop. A week ago, Finnell says he would have put the odds of the health insurance exchanges not opening on Oct. 1 at 5%. Now, he puts the odds at 50%.
John Garven, president, Benico Limited
A lot of our [employer] clients are in the hospitality industry and dont offer coverage and they were preparing to do something and now theres one year relief
my sense is that theyll divert a year. I imagine there will be additional guidance on this, and I think this next time around these clients will be even more prepared and hopefully less confused.
Steve Wojcik, vice president of public policy, National Business Group on Health
Most large employers are well into finalizing benefit changes and plans for 2014. It may mean a temporary pause for some, for others it may mean no change in their plans for 2014. But its definitely a reprieve from reporting requirements and the dollars and staff time that would have been diverted to compliance with the mandate, though the law certainly has other components that have added to plan costs and administrative burdens already.
Thom Mangan, CEO, United Benefit Advisors
The government stated in the delay announcements that the exchanges are still expected to begin open enrollment on Oct. 1, 2013. It is unclear at this point how the delay of the play or pay requirement will affect determination of employee eligibility for subsidies. Presumably the official guidance that Treasury has promised to provide next week will address this issue.
J.D. Piro, leader of Aon Hewitts health law practice
Complying with the ACA is a complex task for many employers. In our recent research, more than half of large and midsize employers said that complying with government regulations such as health care reform was one of the most significant challenges facing their organizations. Even with the guidance already issued by the IRS, employers still had a lot of questions, particularly around the reporting requirements for 2014. This postponement will give employers more time to understand the rules and implement these changes effectively within their organizations.
Garrett Fenton, employee benefits, tax and compensation lawyer, Miller & Chevalier
"For many employers, the announced delay of the pay-or-play rules, and related employer reporting requirements, is welcome relief. But employers should be aware that so far no delay has been announced with respect to other aspects of the law, which may be related to the pay-or-play mandate, in 2014. For example, despite the announced delay, it appears that employers (or insurers for insured plans) will still need to determine if their coverage provides at least 60% 'minimum value' for 2014, and confirm as much in their upcoming summary of benefits and coverage documents."
Shannon Goff Kukulka, partner, Waller
If the delay can be viewed as good news for employers, "perhaps the news isnt quite as good for insurers and healthcare providers who have been counting on increased numbers of patients with health insurance since 2010. The Obama administration framed the delay as an effort to reduce regulatory red tape across government agencies. Other significant effects may include: avoidance of backlash from businesses forced to comply with health care reform before midterm elections in 2014, a delay in the planned reduction of employees hours to below 30 per week (to classify them as part-time for penalty calculations), less pressure on states to expand Medicaid by business interests and meaningful shortfalls in projected funding from the employer mandate $140 billion in revenues over the next 10 years, according to the Congressional Budget Office.
And so go the logistical challenges of the Leviathan health care law. Although we are told that the administration is 'full steam ahead for the Marketplaces opening on October 1,' this latest development begs the question: might other provisions of the ACA be negotiable?"
Rich Stover, principal, Buck Consultants
The delay of the employer responsibility penalties was very surprising and very welcome news for employers. The delay gives employers much needed time to further review and understand the requirements, and to develop the most effective benefit strategy for 2015.
In light of the delay, employers should assess what requirements have been delayed. The delay appears to only apply to reporting requirements and the employer shared responsibility penalty. The other reform requirements such as the exchange notice, 90-day waiting period limits, reinsurance and PCORI taxes, etc. appear to still apply in 2014. Employers should review their 2014 strategy to ensure they are in compliance with all the other ACA requirements that will still apply in 2014.
Mark Gaunya, principal at Borislow Insurance and EBA advisory board member
We have quite a few prospects that need our assistance and time was running short to help all of them. Perhaps now with the delay, we will be able to help more of them and maybe, just maybe, make some tweaks to the law to make it less painful and irrationally tilted toward government over reach.
Cara Woodson Welch, vice president of public policy, news & publications, WorldatWork
The administrations announcement recognizes the array of challenges employers are facing as they attempt to understand and comply with rules that have yet to be finalized. WorldatWork commends the administration for giving employers and HR professionals needed time to digest the new regulations, amend their plans and policies, and ensure that their organizations make the most educated decisions possible in respect to their benefits plan design. We continue to advocate that employers acting in good faith to comply with the law should not be penalized for their efforts.
