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What Happens If There Is No Employer Mandate for Obamacare?

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Photo Credit: Pete SouzaBy Drew Gonshorowski.

A recent Urban Institute report provides the “news” that Obamacare’s employer mandate has negative labor market effects, particularly for low-income Americans. Even think tanks that support Obamacare have realized it broke the labor market, particularly for low-skilled workers.

This revelation shouldn’t be news to anyone, but the report does provide a set of important reminders:

In the short term, research suggests removing the employer mandate will not reduce insurance coverage substantially. The Urban Institute estimates employer coverage will be reduced by 500,000, but coverage gains of 300,000 in Medicaid and exchange coverage will result in a net loss of 200,000. This falls in the middle of estimates from the Congressional Budget Office and the RAND Corporation, both of which provided similar estimates in the past.

Ending the employer mandate would eliminate revenues the government could collect from penalty payments. The uncertainty of employers dropping coverage ties directly into how much federal revenue collection is reduced. Under the CBO’s estimates, revenues are reduced by $130 billion between 2014 and 2023. Under the Urban Institute estimates, revenues are reduced by approximately $46 billion, and “new revenue sources will be required to replace that anticipated to be raised by the employer mandate.” This means that without replacing the funds collected through penalizing employers, part of the Obamacare bill is left unpaid. Any replacement of funds, under the same logic, therefore will be detrimental to hiring as well.

Finally, this study serves as a reminder that Obamacare still distorts labor markets. According to the Urban Institute, “Creating arbitrary thresholds (e.g., potential penalties for firms of 50 or more workers not providing coverage for employees working 30 or more hours per week) for financial requirements will change the employment decisions in some firms, and at least some workers will be adversely affected by them.” Urban also states that costs could affect the hiring decisions of some firms. These points have been made many times before and should come as no surprise. Additionally, Urban states that costs are likely to be passed back to workers in the form of lower wages, and these costs will be placed disproportionately on low-wage workers. The CBO made this point recently, and I estimated exactly what this wage reduction would look like for low-wage workers.

This study is added confirmation Obamacare creates distortions in labor markets, something academics, the Congressional Budget Office and Heritage analysts have been pointing out for a long time.

This article appeared originally at Heritage.com and is re-published in full with the Heritage Foundation’s permission.

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ObamaCare Deductibles To Rise To $6,600 In 2015

By Jed Graham.

ObamaCare deductibles maxed out at $6,350 per person this year, causing no small shock among modest earners, but next year they’ll go as high as $6,600.

Businesses may be less than thrilled to learn that ObamaCare’s yet-to-be-enforced employer penalties will rise from $3,000 per subsidized full-time worker to $3,120.

Although the fines initially set to hit in 2014 were put on ice for a year, that hasn’t stopped the fines from growing. In 2015, employers with at least 100 full-time-equivalent workers will owe $2,080 for each of those workers after an exemption for the first 30.

By 2016, when the ObamaCare employer mandate is supposed to apply to firms with 50 full-time-equivalent workers, the fines will be higher still.

Annual increases in employer penalties and cost-sharing limits are determined by what the law defines as the premium adjustment percentage — how much average premiums rise for private, non-elderly coverage each year.

At least, that’s what the Congressional Budget Office thought. So, initially, did the Department of Health and Human Services.

Read more from this story HERE.

Pelosi: We’re Keeping the Employer Mandate No Matter What Gibbs’ Clients Want (+video)

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Photo Credit: DonkeyHotey / Creative Commons

Photo Credit: DonkeyHotey / Creative Commons

Last week, former Obama press secretary Robert Gibbs suggested that the employer mandate in ObamaCare would not survive, and he certainly has reason to think so. The White House keeps unilaterally changing the enforcement date and the parameters of the mandate, clearly hoping to escape political accountability for it when it finally takes effect. Yesterday, Candy Crowley asked Nancy Pelosi if Gibbs was right, but the House Minority Leader dismissed Gibbs’ prediction as just Gibbs speaking on behalf of his corporate clients:

House Minority Leader Nancy Pelosi (D-Calif.) suggested Sunday that former top Obama aide Robert Gibbs’s comment that the employer mandate portion of the Affordable Care Act won’t survive might be related to Gibbs’s business interests.

“I don’t know who his clients are or what his perspective is,” Pelosi told CNN’s “State of the Union.” “But we are celebrating the fact that we have over seven million who have signed up.” …

Asked again about Gibbs on Sunday, Pelosi expressed exasperation that his comments would be given such prominence. “I don’t know why we’re focusing on that,” she told CNN. “One person says one thing. Seven million people signed up.”

Read more from this story HERE.

White House Delays Health Insurance Mandate for Medium-Sized Employers Until 2016

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By Juliet Eilperin and Amy Goldstein.

For the second time in a year, the Obama administration is giving certain employers extra time before they must offer health insurance to almost all their full-time workers.

Under new rules announced Monday by Treasury Department officials, employers with 50 to 99 workers will be given until 2016 — two years longer than originally envisioned under the Affordable Care Act — before they risk a federal penalty for not complying.

Companies with 100 workers or more are getting a different kind of one-year grace period. Instead of being required in 2015 to offer coverage to 95 percent of full-time workers, these bigger employers can avoid a fine by offering insurance to 70 percent of them next year.

How the administration would define employer requirements has been one of the biggest remaining questions about the way the 2010 health-care law will work in practice — and has sparked considerable lobbying. By providing the dual phase-ins for employers of different sizes, administration officials have sought to lighten the burden on the small share of affected employers that have not offered insurance in the past.

As word of the delays spread Monday, many across the ideological spectrum viewed them as an effort by the White House to defuse another health-care controversy before the fall midterm elections. The new postponements won over part, but not all, of the business community. And they caught consumer advocates, usually reliable White House allies, by surprise, particularly because administration officials had already announced in July that the employer requirements would be postponed from this year until 2015.

Read more from this story HERE.
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Photo Credit: AP Photo/Susan WalshObama’s New Delay of Employer Mandate Violates Plain Language of Law

By Terence P. Jeffrey.

President Barack Obama’s Treasury Department issued a new regulation today that for the second time directly violates the plain and unambiguous text of the Patient Protection and Affordable Care Act by allowing some businesses to avoid the law’s Dec. 31, 2013 deadline to provide health insurance coverage to their employees.

Initially, on July 2, 2013, the administration unilaterally delayed the deadline for the employer mandate until 2015. Now, the administration is unilaterally delaying it for some businesses until 2016.

In its official summary of PPACA, the Congressional Research Service said: “(Sec. 1513, as modified by section 10106) Imposes fines on large employers (employers with more than 50 full-time employees) who fail to offer their full-time employees the opportunity to enroll in minimum essential coverage or who have a waiting period for enrollment of more than 60 days.”

The text of the law itself describes an “applicable large employer” as follows: “The term ‘applicable large employer’ means, with respect to a calendar year, an employer who employed an average of at least 50 full-time employees on business days during the preceding calendar year.”

The final words in the section of PPACA mandating that employers with more than 50 full-time employees provide their employees with “minimum essential coverage” imposes a specific statutory deadline for doing so. It says: “EFFECTIVE DATE.—The amendments made by this section shall apply to months beginning after December 31, 2013.”

Read more from this story HERE.

Chamber of Commerce Vows to Fight ObamaCare Employer Mandate in 2014

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Photo Credit: Fox News

Photo Credit: Fox News

The head of the U.S. Chamber of Commerce vowed Wednesday to fight ObamaCare’s so-called employer mandate and other “onerous” provisions in the year ahead, even as the pro-business group acknowledged the bill as a whole cannot be repealed in the current climate.

The agenda was outlined by Commerce President and CEO Thomas Donohue, in his annual Washington address. Though the law’s requirement on mid-sized and large businesses to provide health coverage to workers was delayed by a year, Donohue said the Chamber still plans to lobby against that mandate in 2014.

“In 2014, we will work to repeal onerous health care taxes; repeal, delay, or change the employer mandate; and give companies and their employees more flexibility in the choice of health insurance plans,” Donohue said. He also cited immigration reform, entitlement reform and more domestic energy production as other major objectives.

“We’re not going to get rid of [the Affordable Care Act] so we’re going to have to find ways to make it work,” Donohue said afterward. “It’s a massive tax bill. It’s a massive rules-and-regulations system. And lots of people are worried about how they are going to get their health care.”

In his speech, Donohue said the health insurance cancellations that “swamped” the individual market last year are expected to hit the small business market even harder this year. And many firms are not hiring and are cutting workers’ hours because of the law’s mandates, he said — despite claims by the Obama administration to the contrary.

Read more from this story HERE.

States Say “No” to Ludicrous Federal Rule That Employers Can’t Check into New Hires’ Criminal Backgrounds

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Photo Credit: APAttorneys general across the country are fighting back against new Obama administration guidelines on businesses using criminal background checks for job applicants and two federal lawsuits that followed, calling both “a quintessential example of gross federal overreach.”

The nine attorneys general sent the letter Wednesday to the Equal Employment Opportunity Commission, which in April 2012 voted in favor of the new guidelines that warn such checks can discriminate against African-Americans because they being are arrested at a disproportionate rate compared to the rest of the U.S. population.

Fifteen months after issuing the guidelines — which included the recommendation that businesses eliminate such policies — the commission filed lawsuits against discount retailer Dollar General and a BMW facility in South Carolina for alleged civil rights violations.

“We believe that these lawsuits and your application of the law, as articulated through your enforcement guidance, are misguided and a quintessential example of gross federal overreach,” the attorneys general wrote in a nine-page letter to EEOC Chairman Jacqueline Berrien and the agency’s four commissioners.

The June 11 suits allege Dollar General violated the civil rights of two applicants. In the one case, the applicant alleged she was denied employment even though a felony conviction was incorrectly attributed to her.

Read more from this story HERE.

Judge Michael McConnell: Obama Suspends the Rule of Law

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Photo Credit: David G. KleinPresident Obama’s decision last week to suspend the employer mandate of the Affordable Care Act may be welcome relief to businesses affected by this provision, but it raises grave concerns about his understanding of the role of the executive in our system of government.

Article II, Section 3, of the Constitution states that the president “shall take Care that the Laws be faithfully executed.” This is a duty, not a discretionary power. While the president does have substantial discretion about how to enforce a law, he has no discretion about whether to do so.

This matter—the limits of executive power—has deep historical roots. During the period of royal absolutism, English monarchs asserted a right to dispense with parliamentary statutes they disliked. King James II’s use of the prerogative was a key grievance that lead to the Glorious Revolution of 1688. The very first provision of the English Bill of Rights of 1689—the most important precursor to the U.S. Constitution—declared that “the pretended power of suspending of laws, or the execution of laws, by regal authority, without consent of parliament, is illegal.”

To make sure that American presidents could not resurrect a similar prerogative, the Framers of the Constitution made the faithful enforcement of the law a constitutional duty.

The Justice Department’s Office of Legal Counsel, which advises the president on legal and constitutional issues, has repeatedly opined that the president may decline to enforce laws he believes are unconstitutional. But these opinions have always insisted that the president has no authority, as one such memo put it in 1990, to “refuse to enforce a statute he opposes for policy reasons.”

Read more from this story HERE.

Obama Delays Employer Mandate, but Leaves HHS Mandate in Effect for Christian Companies

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President Obama’s decision to delay the implementation of Obamacare’s employer mandate gives no relief to Christian business owners who object to providing contraception to employees as required by the Health and Human Services mandate, which remains in effect and on pace to reach the U.S. Supreme Court in the midst of the 2014 midterm elections.

The delay of the employer mandate does not affect religious people who oppose the HHS mandate. “They’re going to be subject to a different penalty,” Kyle Duncan of The Becket Fund for Religious Liberty, which is challenging the constitutionality of the mandate on behalf of a private company, Hobby Lobby, told the Washington Examiner. “Not the $2,000 per employee penalty that the administration has said it’s going to suspend for the year, but the $100 per employee, per day, IRS excise tax which is in a different section of the IRS code, but the administration has not said they’re going to suspend that.”

Duncan explained that “the reporting requirements that trigger the excise tax, those are different reporting requirements under different Treasury regulations; they predate the Affordable Care Act altogether.”

Michael Cannon, the Cato Institute’s health care policy expert, agreed with Duncan’s assessment. “It’s not that the Obama administration is unwilling to relax onerous mandates on employers,” he noted in an email to the Examiner. “They just don’t think religious freedom is a good enough reason.”

Read more from this story HERE.

Defying the Obama Administration on Religious Liberty

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Hobby Lobby gained national attention when its leadership announced they would not bow to the Obama Administration’s violation of their religious liberty. Thousands of Americans pledged to shop at the retailer over the weekend to show their appreciation for this stand—a stand that could cost the company up to $1.3 million in fines per day.

Like many other companies, Hobby Lobby’s health insurance plan renewed on January 1, causing them to be subject to the Health and Human Services (HHS) mandate under Obamacare. This mandate forces employers to pay for coverage of abortion-inducing drugs like the “morning after” and “week after” pills, which directly violates many Americans’ deeply held beliefs—including Hobby Lobby’s owners, the Green family. The Greens, who founded the company, close all its locations on Sundays and seek to operate in accordance with Christian principles—including offering an employee health care plan that aligns with those values.

The Obama Administration’s outrageous position is that business owners’ rights to religious freedom end when they walk into their workplaces, claiming that “for-profit, secular employers generally do not engage in any exercise of religion protected by the First Amendment.”

If employers don’t change their health plans to comply, they will be hit with fines—up to $100 per employee per day. But if they stop providing health coverage, Obamacare’s double whammy means that, come 2014, employers with more than 50 employees could instead be hit with fines for that.

Thirteen for-profit companies have received rulings touching on the merits of their cases from the courts so far. Ten have secured relief—though temporary—from having the mandate enforced against them. Three companies have been denied relief: Hobby Lobby, Autocam Corp., and Grote Industries.

Read more from this article HERE.

SCOTUS Opens Door to New Obamacare Challenge

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photo credit: onecle

It feels a bit like deja vu all over again. The Supreme Court has ordered an appeals court to reopen arguments on the Affordable Care Act’s employer mandate and contraceptive coverage provisions, opening a potential path back to the highest court by late 2013.

The case at hand is one filed Liberty University, a Christian college in Virginia. The university had filed one of the earlier suits against the health care law, which was among the dozens dismissed by the Supreme Court when it ruled the Affordable Care Act’s individual mandate to be constitutional.

The Liberty University case also is unique in that it was the only one where the appeals court decided it couldn’t even make a ruling, given that the provisions it was supposed to rule on hadn’t come into effect. The Fourth Circuit Court of Appeals ruled that the Anti-Injunction Act precluded any rulings about the mandate’s constitutionality before the mandate actually took effect and individuals began paying penalties.

The Supreme Court sided against that viewpoint. In its decision, the justices said that it was within the court’s power to rule on the health law now. That leaves Liberty wanting some answers on the provisions it challenged in court. The Obama administration also agreed that these issues should go back to the Fourth Circuit. Other courts are already hearing new challenges to the health care law, too.

Liberty University doesn’t want to challenge the individual mandate; we already know what the Supreme Court thinks about that. But it does want are answers on two other provisions that it challenged: the mandate that employers provide insurance coverage and the requirement that contraceptives be covered. ”Petitioners’ remaining claims should be subject to adjudication by the lower courts,” Liberty University’s lawyers wrote in a July 2012 petition for re-hearing.

Read more from this story HERE.