Employer Health Care Mandate Delayed

The Obama administration has delayed a portion of the Affordable Care Act, which will extend the deadline for employer mandated health care to 2015. The employer mandate would have required businesses with more than 50 employees to provide health care benefits. If employers fail to comply, they will be fined $2,000 dollars per employer. This may lead businesses to cut jobs and reduce hours to avoid the regulation, but major parts of the Affordable Care Act are still in effect.

Bruce Japsen, a health care reporter for Forbes, joins us on Chicago Tonight at 7:00 pm to break down the employer mandate and explain the implication of the extension. Read our Q&A with Japsen below:

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What are the parts of Obamacare that are still in effect and what are the parts that will be postponed?

What’s in effect now is that people who are 26 and under can stay on their parents’ health care. This program is going well. Under Medicare, the elderly people, (which is part of Obamacare) can get outpatient screening paid for that they didn’t used to get, such as colonoscopies, diagnostic tests etc. Also, broader coverage for individuals has been expanded. People with no coverage, since it’s too expensive, can go to Exchanges and shop for a health care plan which kicks in January 1. Also, Medicaid which helps poor people expands in January. What made news was the delay in employer mandate. Companies that did not provide coverage for workers have to start providing coverage, so companies with 50 or more employers. The delay happened because the administration was hearing too much from employers that they weren’t ready and some threatened to drop coverage.

What is the coverage?

Well, we don’t know what will be the basic coverage. It is not a one size fits all. People will have to go to Exchanges and see all the benefits.

Why is there a delay?

The concern was that general employers will not provide health benefits since they have never been subject to rules and regulations. Small companies will have to hire a health benefits person, a new computer system; and for small companies, the costs are more expensive. Small businesses can’t even provide 401Ks. Big companies have large human resources to cover the benefits. Health care plans are costly, and costs about $8,000-$10,000 or $12,000 to cover one person for benefits.

Companies will have to decide how much it will provide and how much the worker will provide.  One year ago, the Supreme Court ruled against small companies providing health care benefits. Some analysts stated that 50 percent of small businesses weren’t ready and needed more time. The penalty for not providing a health care plan is $2,000 per worker, which may lead some companies to just drop coverage or cut hours to less than 30 per week so they don’t have to comply with the rules.

This is more of a political story than a story that will have an impact. Small businesses can still shop for health care at the marketplace depending on their income.

What is the Illinois Health Insurance Marketplace?

It provides several health care options. Six companies will participate in the Exchanges with subsidies. We can tell people what coverage they will have, and a flood of advertising will begin very soon with what kind of benefits are out there and who is eligible. This is a win for the insurance industry. When people say that Obamacare is complex, it’s not. Starting October 1, anyone with a full-time job will have six months for open enrollment to find a coverage plan.

What are the short-term effects?

Politically, it is not good. Republicans hate this. The delay can be used to blame the system, and call it a mess and too complicated. It will give more ammunition to the Republicans and people who hate this law to say that it is screwed up. There will be no immediate effect. If employers will drop health care benefits then they will do so, but people will have more options. This is more of a political story. They announced this just before the Fourth of July so that people will not pay attention to it.

Interview has been condensed and edited.

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