ACA revision delays mandate for subset of large employers

February 28, 2014

Employers with 50 to 99 workers will have until 2016 before they must offer coverage.

House Republicans looking into the ultimate impact of Obama's latest alteration

Timothy JostUndoubtedly, Affordable Care Act (ACA) guidelines will be modified in time to overcome implementation challenges, according to Timothy Jost, professor of law at the Washington and Lee University School of Law.

“This is probably far more ambitious than anything that’s been tried in the private sector,” Jost says. “You could say it’s surprising it’s gone as smoothly as it has.”

However, Jost notes that the delay of the employer mandate is the most noteworthy rework of ACA. 

In July 2013, the administration moved the original 2014 mandate to 2015, requiring employers with 50 or more employees to offer healthcare coverage or pay a fine. However, last month, officials revised the date again, allowing employers with 50 to 99 workers until 2016 before they have to offer coverage. Still, larger employers (100 or more workers) must comply with the 2015 deadline.

Part of the reason behind the delay, according to federal officials, was to allow more time to simplify the reporting process for employers. Critics believe the mandate ultimately will drive employers to cut jobs. Republicans on the House Energy and Commerce Committee launched an investigation to estimate the impact resulting from the change.

A 2011 survey by McKinsey found that 30% of employers would consider dropping coverage. However, many also point to the fact that nearly all large employers already offered coverage prior to ACA.

Others are angling for the penalty related to the individual mandate to be forgiven for consumers in 2014.

Several other ACA provisions were adjusted during implementation-such as internal and external appeals of coverage determinations for insurers and the combining of out-of-pocket costs for medical and pharmacy when calculating caps on consumer outlays. Other adjustments were necessary because IRS regulations were not available to reflect the ACA.

Overall, Jost believes the administration is responding and trying to prioritize ACA implementation fixes.

“Since Congress is not functional, the administration is not able to go to Congress to ask for technical corrections,” Jost says. “It has been prioritizing the provisions that are really important, like getting the exchanges up and running, and allowing more time for compliance.” 

Jost adds that ACA isn’t taking place in a vacuum. The country is still recovering from “one of the great economic shocks in our lifetime.” 

Of course, many ACA challenges are politically driven. For example, Republican states are more likely to default toward not expanding Medicaid and not operating their own exchange marketplaces.

“This is all taking place in the context of an opposition party that has been almost entirely defined over the last four years in opposition to this program,” Jost says.

He expects those who have been adamantly opposed to the law will come to terms with the reforms it has enacted.