Business owners with 50 to 100 full-time employees were dealt another welcome surprise from the Obama administration yesterday. The employer mandate piece of Obamacare will be delayed yet another year—until the beginning of 2016—for businesses with 50 to 100 full-time employees. (You can read more about the new Obamacare regulations on the IRS web site.)
The new delay raises some interesting questions: Will businesses with 50 to 100 full-time employees ever be subject to an employer mandate? Or does this new delay suggest that President Obama doesn’t consider the employer mandate a critical piece of Obamacare and will ultimately repeal it?
Forbes columnist Avik Roy, senior fellow at the Manhattan Institute for Policy Research, suggests that perhaps the new delay is a sign that the Obama administration isn’t very committed to the mandate. After all, the mandate ensures that health insurance remains an employer-sponsored system. The individual mandate, on the other hand, could unhinge health insurance from employers by forcing everyone to buy insurance on their own—something many health policy experts say would be a good thing.
Repealing the employer mandate “would encourage a transition away from costly, inefficient employer-sponsored coverage, and towards portable, individually-owned insurance policies,” Roy said in congressional testimony last summer. “As you all know, economists have long advocated for this transition, and repealing the employer mandate would go a long way toward achieving it.”
Last summer, former Washington Post columnist Ezra Klein also argued in favor of repealing employer mandate altogether. He pointed to the unintended consequences the mandate would have on business owners and the economy: It would dissuade employers from hiring low-income workers who qualify for subsidies. It would motivate employers to cut their current employees’ hours back to part-time status to avoid having to offer them health insurance. And it would place huge costs and administrative burdens on companies large and small.
Klein pointed to this Center on Budget and Policy Priorities brief that lays out the flaws of Obamacare’s employer mandate.
There’s another reason to believe the employer mandate will be repealed (or at least delayed again): The mandate is now scheduled to take effect in early 2016—months before the 2016 presidential election. If President Obama wants to bolster the Democratic presidential candidate’s chances of victory, he may want to think twice about slapping new burdensome regulations on business owners that year.
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