Federal lawmakers from Kentucky and Indiana are pleased with the Obama administration’s decision to delay the employer mandate provision of the Affordable Care Act, but Republicans argue this shows the overhaul should be repealed.
Under the law, U.S. businesses with over 50 employees must provide health insurance to their workers and was widely criticized by companies and GOP lawmakers. The mandate was scheduled to begin in 2014, but a post from the White House blog said after ongoing discussions with businesses, it will be implemented on January 1, 2015 instead.
Senators Mitch McConnell, R-Ky,, who has been a constant critic of the law, and Dan Coats, R-In., both issued statements jeering the White House’s announcement as a sign the president’s health care law is too costly.
Political observers quickly pointed to the decision being pushed back until after next year’s mid-term elections, where it was expected to be a theme to help turnout GOP voters.
Republican Andy Barr is a freshman congressman who represents central Kentucky and ran heavily against the health care law in 2012. He says the announcement is an important temporary relief, but an acknowledgement that the Affordable Care Act— also known as Obamacare—is a “train wreck” overall.
“This a good decision for American employers and employees who are facing very costly mandates. And so while this is an important step forward we need to continue to fight to fully repeal Obamacare so that it doesn’t continue to have the threat of killing jobs,” he says.
Supporters of the health care overhaul point out the employer mandate affects around 1 percent of the American workforce and approximately 97 percent of small businesses are exempt. That represents a small constituency, but it remains a favorite jab of GOP critics who note Obamacare’s favorable ratings are slipping.
The administration’s public rationale is the health care exchanges for individuals cover the vast majority of Americans and should therefore come first.
Meanwhile, other provisions of the law such as new tax credits for citizens to buy health insurance if their employer does not provide coverage are still set to kick in next year.
“Our most immediate priority is the health care exchanges, where more than 300,000 Kentuckians will have full access to insurance starting January 1,” says Kentucky Democratic Congressman John Yarmuth, who voted for the law three years ago. “The next step is to get full implementation of the law right, and part of that is making sure the employer mandate does not inadvertently result in loss of coverage for employees.”
Still, observers such as The Washington Post’s Ezra Klein have called the employer mandate “bad policy” that he argues should be repealed.
From The Washington Post:
By tying the penalties to how many full-time workers an employer has, and how many of them qualify for subsidies, the mandate gives employers a reason to have fewer full-time workers, and fewer low-income workers.
Those companies probably employ around one percent of American workers.
But that’s still a lot of employers, and a lot of workers, and so the health-care law has gotten a stream of bad press as one employer or another threatens to cut hours or fire workers in order to dodge the penalty.
It’s also proven difficult to enforce. Implementing the mandate requires a complex reporting process that’s left the administration flooded with comments from anxious employers—even those who offer insurance and have nothing to fear from the provision.
“Small businesses around central and eastern Kentucky have told me consistently that the employer mandate feature of Obamacare is forcing them to reduce the number of employees they hire, and that it prevents them from hiring new employees and cut hours,” says Barr. “It’s creating an incentive for businesses from moving from a full-time work economy to a part-time workforce. I want to repeal Obamacare because it’s bad for the American people and imposes a penalty on people who cannot afford health insurance.”
Not all lawmakers are in their partisan corners when it comes to the employer provision, however.
Last month, Democratic Sen. Joe Donnelly of Indiana joined with GOP colleague Susan Collins of Maine to ask President Obama for a relief in the law regarding businesses.
The two lawmakers worked on a compromise to tinker with the law by lowering the yardstick for what’s considered a full-time employee. Donnelly says the decision is a prudent step by the administration that allows Congress to work on improving the law.
“I am pleased that the treasury announced they will be implementing what Senator Collins and I asked for last month: transition relief, free of penalty, for employers as they work to understand what health care reform means for their businesses and as we work to make common sense improvements,” he says.
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