The delay of fines against large employers who don’t provide health care for workers won’t affect the opening of the state exchanges for individual insurance, officials say.
Insurance Commissioner Dave Jones said the move wouldn’t have a lasting effect on the Affordable Care Act, pointing out that more than “92 percent of California employers with more than 50 employees already offer health insurance to their employees … even without the existence of a penalty.”
“Employees whose employers do not provide health insurance will be able to purchase health insurance in California’s new health benefit exchange,” Jones said. Many will be eligible for subsidies, he said.
Officials at Covered California, the state health insurance exchange, also said the move would have no affect on the marketplace that begins writing individual policies in October.
In delaying the large-employer penalties to 2015, the Obama administration cited “concerns about the complexity of the requirements and the need for more time to implement them effectively” as reasons for the extension. The requirement for small business already had been delayed at the federal level.
“The important news is what hasn’t been delayed or changed, which is the coverage expansion and new consumer protections and benefits that start on Jan. 1, 2014,” said Anthony Wright of the California non-profit group Health Access. “Nobody lost coverage as a result of this announcement.”
Still, Jones said: “The requirement that large employers provide health insurance to their employees is an important component of ObamaCare and the Administration should make sure that this provision can be implemented in 2015.”
The largest issue with the large employer fines was reporting of hours worked. “The one-year delay in reporting requirements will allow larger businesses time to adjust and provide additional input to the Treasury on how the proposed requirements will work best,” said Terry Gardiner of the Small Business Majority advocacy group.
Gardiner said 96 percent of U.S. businesses were under the 50-worker threshold. “For these employers nothing changes because they were already exempt from the employer responsibility requirements.”
News of the delay came late July 2 in a Treasury Department blog post: “First, (the delay) will allow us to consider ways to simplify the new reporting requirements consistent with the law. Second, it will provide time to adapt health coverage and reporting systems while employers are moving toward making health coverage affordable and accessible for their employees.”
A top Republican congressman, Tom Price of Maryland, said the Affordable Care Act delay was “an admission that this law is simply too overreaching, too intrusive, too unworkable and too destructive to the American people. If they can’t manage to enforce their own law after three years of preparation, what does this say about their ability to actually deliver health care?” Price is a surgeon and has introduced legislation to repeal Obamacare.
Meanwhile, in California, two large health care insurers said they would be exiting the state’s individual policy market. Neither United Health Group nor Aetna participated in the state exchange program. The insurers’ individual policy businesses were described as relatively small.