Is Support for the Employer Mandate from Liberal Activists Wavering?

Posted by Paul Fiore on July 14, 2014

It’s certainly hard to keep up with latest developments surrounding the employer mandate provision in the Affordable Care Act (ACA). This provision states that certain employers with 50 or more “full-time equivalent” employees (FTEs) who do not provide affordable health care coverage may be assessed a penalty if at least one full-time employee qualifies for a premium tax credit and uses it to purchase coverage in the health insurance exchange. Additionally, the law requires employers to provide prescribed health coverage while, at the same time, penalizing some employers who may fail to offer what is defined by the law as “affordable” coverage.

It is generally acknowledged that the Obama administration delayed the employer mandate for the second time earlier this year because of the complexity of the provision. (If most businesses took one look at the regulation and knew instinctively that it appeared “unworkable,” why didn’t the bureaucrats?) The Treasury Department’s IRS division, tasked with enforcing the provision, has struggled mightily with developing a rulemaking that isn’t so complex as to be unenforceable.

Through all of this, the Republicans (and the business community) have not let up in their criticism of the ACA in general, and the employer mandate in particular. It now appears that there may have been some surprising folks listening. In a recent Health Affairs blog post, Timothy Jost, a professor at Washington and Lee University School of Law and a long-time advocate of the ACA, wrote that, “Repeal of the employer mandate might, in fact, not be such a bad idea, as long as the current mandate was replaced with a better alternative.

In a similar vein, the president of the Commonwealth Fund, a liberal foundation promoting better healthcare access, posted his own blog, also questioning whether the employer mandate is “Essential or Dispensable?” He noted that. “…modeling… suggests that when fully implemented in 2016, the employer provisions will increase the number of insured Americans by only a few hundred thousand. The overwhelming proportion of U.S. employers already provides insurance to their employees, and would continue to do so without the penalties in the ACA, the analysts contend.

This movement may have been kick-started by a research paper titled, “Why Not Just Eliminate the Employer Mandate?” that came out in May of this year from the Urban Institute, a non-partisan, social policy think tank. In the paper’s overview, the authors stated their research found that “… eliminating the employer mandate will not reduce insurance coverage significantly, contrary to its supporters’ expectations. Eliminating it will remove labor market distortions that have troubled employer groups and which would harm some workers. However, new revenue sources will be required to replace that anticipated to be raised by the employer mandate.

And now, just as support for the employer mandate appears to be wavering, Speaker of the House John Boehner, R-Ohio, announced last week that it is his intent to sue President Obama over his delay of the employer mandate. The claim is that the president had no legal right to change the law by delaying the mandate.

Early rumors about a lawsuit against the president were betting on immigration enforcement as the target, but that may have been too risky politically. So, the speaker released a statement on July 10, saying, “…this isn't about Republicans versus Democrats; it’s about the Legislative Branch versus the Executive Branch, and above all protecting the Constitution.” All of this begs the question, where would it leave the business community if the speaker won the lawsuit?

In the meantime, a close reading of the posts above will tell you that a repeal of the mandate won’t likely come about without some form of a “fix” to replace it. This is, of course, the complicating factor that could ultimately determine how far this initiative may be taken. Although on Capitol Hill there is also an undercurrent of Democrat rumblings that accept the notion that the ACA is flawed and needs work, at this point, nothing we have witnessed in the current political environment leads us to believe a compromise “repeal and replace” for the employer mandate would garner the necessary votes for passage.
Keywords: Healthcare