The employer mandate keeps getting delayed and theres been increasing talk in the industry about what would happen if it simply stayed delayed, forever.
Eliminating the Affordable Care Acts employer mandate would not significantly reduce the number of insured Americans, according to a recent analysis by researchers at the Urban Institute in Washington. But, it would also not eliminate your employer clients need to maintain an ACA-compliant plan, one industry expert notes.
Completely abandoning the employer shared responsibility rule would reduce the number of people in 2016 with health insurance from 251.1 million to 250.9 million, a decrease of just 200,000 people, the report says, adding that it would also eliminate labor market distortions in the law and lessen opposition to the law from employers.
Regardless of whether the mandate is eliminated, however, work will remain for benefit advisers helping employers meet ACA compliance, says Jessica Waltman, senior vice president of government affairs for the National Association of Health Underwriters.
Maintaining an ACA-compliant plan requires a lot of other components, she says. Employers have to comply with all of the market reforms and notice requirements and offer all of the benefit mandates, as well, requirements brokers and agents can assist employers with, she says.
There are significant penalties for not maintaining ACA compliance with other requirements of the health law, such as limits on mandatory waiting periods, she adds.
Also, employer-sponsored health plans will not go away if the employer shared responsibility rule is eliminated, she says, noting that the value of benefit advisers will remain there, as well. The vast majority of businesses affected by the mandate offered coverage before the mandate.
The authors of the analysis Why Not Just Eliminate the Employer Mandate? agree. About two thirds of American workers now have offers of employer coverage when there is no mandate to do so, they write. Most employers would not drop coverage if the penalties were eliminated, the report says.
Ending the employer responsibility rule would, however, eliminate the federal revenue expected from penalty payments that employers would pay under the law, which the authors estimate at just less than $4 billion in 2016. Slight increases in Medicaid and marketplace subsidies due to the elimination of the employer requirement would also cost the government about $46 billion between 2014 and 2023.
Alternative sources of revenue would have to be found to compensate for the federal loss of penalties, the analysis notes.
The Internal Revenue Service in February issued final guidance saying that employers with fewer than 100 employees wont have to provide health insurance coverage until Jan. 1, 2016.
Previously, on July 2, 2013, the Obama administration delayed the need for all employers with 50 or more employees to provide health insurance coverage until Jan. 1, 2015.
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