The Obama Administration has announced that it will delay the implementation of the Employer Mandate part of ObamaCare for a year–it was scheduled to go into effect in January 2014. It will now go into effect in January 2015.
A blog post by White House senior adviser Valerie Jarrett on the White House blog explained that the goal of the postponement is to help “[cut] the red tape” in the “reporting process” for employers, and to give employers “more time to comply.” The changes come as a response to concerns expressed in “ongoing discussions with businesses” that “you need the time to get this right,” Jarrett wrote.
“It will allow us to consider ways to simplify the new reporting requirements consistent with the law,” wrote Mark Mazur, assistant secretary for Tax Policy at the U.S. Department of the Treasury, in announcing the decision. “Second, it will provide time to adapt health coverage and reporting systems while employers are moving toward making health coverage affordable and accessible for their employees.”
However, there seems to be another side of the story.
The article at Breitbart reports that the pushing back of this deadline is illegal.
And the Employer Mandate is mandatory. The law Congress wrote explicitly commands that this provision takes effect in January 2014. The ACA (ObamaCare) does not permit the government to grant a reprieve or an extension.
Yet in a blatantly illegal move, the Obama administration is presuming to rewrite the ACA by choosing not to enforce provisions that are causing visible problems. The IRS—which is tasked with enforcing the Employer Mandate—will simply not enforce it until 2015. Every large employer in the country is under the mandate. If they don’t comply, then they are breaking federal law.
But the IRS not enforcing Section 1513 is like a policeman who patrols a stretch of road who says for the next year, he won’t issue any speeding tickets. He has no authority to suspend the law, but if he chooses to violate his duty by failing to enforce the law, then to all the motorists on the road it’s as if the law does not exist.
There are two main political motives for this move. First of all, the implementation of ObamaCare is not going smoothly, and it is to the political advantage of the party that passed the law (Democrats) to push off at least one major problem in implementation until after the 2014 mid-term elections. Secondly, because employers will not be forced to provide health insurance, employees will be faced with a choice–join the government run healthcare exchanges (sky-high premiums) or pay a fine (much lower). The government is hoping that if employers are not required to provide health insurance for employees, employees will be driven into the government-run healthcare exchanges.
It’s worth noting that the ACA (ObamaCare) only subsidizes insurance policies on an exchange run by a state. Yet 34 states have refused to join this government-run debacle, so in those states the U.S. Department of Health and Human Services (HHS) will set them up.
This is why the IRS issued a regulation last year saying that these tax credits for state-run exchanges also extend to HHS-run exchanges. Several lawsuits are now underway challenging the IRS Rule, and they should quickly lead to federal courts striking down the regulation.
The bottom line here is simple–ObamaCare is a mess–politically and practically. Politically, the fact that the law was passed by a parliamentary technicality with only Democrat votes may come back to bite the Democrats as the problems with the law become evident. Practically, the law does not seem to be well thought out or well written. It is quite possible it will collapse under its own weight.