Business groups are cheering the Obama administration’s decision to delay for one year a requirement that employers provide health insurance to employees, even as some warn that the move only pushes inevitable problems with the mandate into the future.
Since the 2010 enactment of the health-care overhaul, employers have railed against many of its provisions, including the requirement that firms with more than 50 workers provide health insurance to employees who work more than 30 hours a week.
Businesses said the complex reporting requirements that come with the law would eat away at valuable staff time. In addition, many businesses were concerned that the federal reporting systems used by employers to report on their employees’ health benefits were untested. Also, they said, the law’s regulations have yet to be fully fleshed out.
At minimum, the business advocacy groups said, the delay would give employers time to learn more about how the health-care marketplace is reshaping itself. Employers said they would benefit by seeing how the new health insurance exchanges are working and what options are available from health insurance plans before they make crucial decisions about health-care offerings for their workers.
“It is a welcome relief for most employers, especially for those who had to make some decisions about benefit changes and maybe even workforce changes for 2014,” said Steven Wojcik, vice president of public policy at the National Business Group on Health, a nonprofit association of more than 360 large employers. “We should know a lot more a year from now.”
Bill Dunkelberg, chief economist for the National Federation of Independent Business, which opposed the health-care law arguing that it would raise the cost of doing business, also called the delay a wise move.
“Since nobody is ready , it probably prevents a lot of chaos,” he said.
The vast majority of firms affected by the so-called employer mandate already offer health insurance. But some of those plans would have to be enhanced — and, thus, become more expensive — to comply with the health-care law.
Many opponents of the Affordable Care Act have argued that the law would become a clear disincentive to create new jobs in a struggling economy, particularly for firms that have just less than 50 workers. Some employers claimed they would cut work weeks below the 30-hour threshold to avoid the mandate.
NFIB is among the organizations that warn that the law will be as unworkable next year as they believe it is now.
“This is simply the latest evidence that implementation of this terrible law is going to be difficult if not impossible, and the burden is going to fall on the people who create American jobs,” said Amanda Austin, director of federal public policy for the business group. “Temporary relief is small consolation. We need a permanent fix to this provision to provide long-term relief for small employers.”
Michael Tanner, a senior fellow at the Cato Institute, a Libertarian think tank, said the delay does not change what he sees as the overarching problem the law poses for businesses.
“It is delaying the inevitable,” he said. “The problem is going to still be there a year from now, and the problem is that it is going to raise the cost of hiring workers.”
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