On Tuesday, I offered my opening thoughts about the surprise decision by the Obama administration to delay a central element of Obamacare that requires employers to provide insurance the federal government deems acceptable or pay penalties. Over at Cato, Michael Cannon argues that the delay in the employer mandate necessitates a delay in the rest of the law, because of the way it interacts with another core provision.
One of the main ways that President Obama’s health care law plans to expand insurance coverage is by offering subsidies for individuals to purchase insurance on government-run exchanges. There are a number of eligibility requirements attached to the subsidies such as income level and immigration status. But another fundamental requirement is that applicants for federal subsidies must be able to show their employer does not offer health insurance that meets the federal government’s standards for affordability and breadth of benefits. If the employer offers qualifying health insurance, then the worker is not eligible.
Yet in its Tuesday announcement, the Treasury Department said it was not only delaying the implementation of the employer mandate, but also the employer insurance reporting requirements. If the Obama administration won’t be making judgments on whether employers are meeting the requirements of Obamacare, how can it assess individuals’ eligibility to receive subsidies to purchase insurance on the exchanges?
In its statement, Treasury explained, “We expect to publish proposed rules implementing these provisions this summer, after a dialogue with stakeholders — including those responsible employers that already provide their full-time work force with coverage far exceeding the minimum employer shared responsibility requirements — in an effort to minimize the reporting, consistent with effective implementation of the law.”
So, perhaps administration officials believe there’s a way to tweak the reporting requirements without affecting the process for determining exchange eligibility. But it isn’t yet clear how they plan on resolving this issue. And the exchanges are supposed to be up and running on Oct. 1.