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Reactions to PPACA employer mandate extension vary from relief to disappointment

By , - Last modified: July 3, 2013 at 7:50 AM

2:50 p.m.: Rich Umbdenstock, president and CEO of the American Hospital Association, called the announcement "troubling for those who will not gain coverage through their employer."

"The goal of the ACA was to extend coverage to the uninsured, which required a shared responsibility from all stakeholders. We are concerned that the delay further erodes the coverage that was envisioned as part of the ACA," Umbdenstock said.

"This delay comes at a time when there is significant uncertainty regarding Medicaid expansion. While the administration has already recognized that some of the Medicaid and Medicare Disproportionate Share Hospital programs cuts should be delayed because the level of coverage envisioned in the ACA is not being met, this announcement clearly shows the need to eliminate the cuts for two years," he continued.

"As the administration continues to recommend adjustments to the law, this should be a key consideration. A growing number of Congressmen, led by Rep. John Lewis (D-GA), agree with this solution.

"We will continue to work with Congress and the administration on the implementation of the law to make sure that the coverage needs for the uninsured are met."

1:30 p.m.: In a posting on the White House blog, senior presidential adviser Valerie B. Jarrett said the delay is intended to cut red tape, simplify the reporting process and give businesses more time to comply.

"We have heard the concern that the reporting called for under the law about each worker's access to and enrollment in health insurance requires new data collection systems and coordination," Jarrett wrote. "So we plan to re-vamp and simplify the reporting process. Some of this detailed reporting may be unnecessary for businesses that more than meet the minimum standards in the law. We will convene employers, insurers, and experts to propose a smarter system and, in the interim, suspend reporting for 2014."

The employer mandate penalties are based on that reporting, Jarrett said, which is why they won't be collected for 2014.

"This allows employers the time to test the new reporting systems and make any necessary adaptations to their health benefits while staying the course toward making health coverage more affordable and accessible for their workers," she said.

Jarrett, who oversees the Offices of Public Engagement and Intergovernmental Affairs, did not discuss how the reporting requirements will interact with the individual health insurance marketplaces that are scheduled to open on Oct. 1, but she said "we are on target" to open the marketplaces by that date.

1 p.m.: "The implementation of the ACA has seen many twists and turns on its way to 2014," said Aji Abraham, senior vice president of business development at Capital BlueCross, a nonprofit insurer based in Susquehanna Township.

"This delay in implementation of the employer mandate (or as some call it, the shared responsibility provision), will likely be welcomed by employers who face numerous, complex decisions around employee benefits every year – that have only intensified as health care reform is being implemented. As always, Capital BlueCross stands ready to assist our customers and employers, as we continue to educate the public on the implementation of the law and the many future changes we are likely to see."

Highmark Inc., a nonprofit insurer based in Pittsburgh that has a significant presence in the midstate, also released a statement saying it would continue to work closely with customers on understanding the law and what their best options are.

"This announcement does not impact other important facets of the Affordable Care Act, including the health insurance marketplaces (or exchanges) that are scheduled to go live on Oct. 1; the individual mandate that requires individuals to be enrolled in health coverage beginning on Jan. 1, 2014, or pay a penalty; and the availability for many individuals of premium tax credits and cost-sharing reductions for health coverage, effective for coverage that begins on Jan. 1, 2014," the release said.

11:55 a.m.: "Although the employer mandate has been delayed for one year, there are still many hurdles employers need to clear," said Eric Beittel of Enders Insurance. "The largest is the underwriting/pricing changes, followed by the new options available via exchanges. Employers still need to consult their advisers and review changes/options."

11 a.m.: Antoinette Kraus, project director of the Pennsylvania Health Access Network, said PHAN "is pleased to see the administration continuing to implement the Affordable Care Act in a careful and thoughtful manner."

"This delay will not have a big impact since most employers already offer coverage and this delay does not apply to rest of the law," Kraus said. "This will give employers more time to consider how to come into compliance. Starting in October individuals and small businesses will be able to start enrolling on the new health insurance marketplace, this will be good for Pennsylvania families, individuals and small businesses."

10:30 a.m.: Steve Kern, chairman of MWN's employee benefits group, said this delay is a bit different than previous ones.

"It is true that other PPACA provisions have been delayed (automatic enrollment and, more significantly, the application of nondiscrimination requirements to fully insured plans are examples)," he said. "But in those situations, the delay was announced immediately pending the issuance of guidance by the regulatory agencies. Here, significant guidance was issued well in advance of the effective date.

"Perhaps I'm being cynical, but my sense is that the primary motivation behind this delay is political."

However, Kern said, employer frustration with the shared responsibility provisions – part of the employer mandate -- has grown louder during the one year since the Supreme Court's ruling "as employers tried to deal with the complexity of the law and the costs associated with compliance."

9:45 a.m.: Much of the reaction in the midstate this morning has been akin to relief.

"Obviously this is welcome news for many employers," said Rob Glus, partner and consulting actuary at Conrad Siegel Actuaries, which is based in Susquehanna Township. "Even for those employers that have already done the analysis of their potential exposure and developed a plan for implementation, this provides extra time to adjust their administrative procedures and staffing policies to comply with the rules, and provides an opportunity to test internal tracking and reporting systems."

Glus noted that one outstanding question is how this delay might affect eligibility for federal subsidies in the exchange.

"Because eligibility for subsidies is affected by an employer offer of minimum, affordable coverage, an employer will still likely need to provide some sort of certification on the level of coverage provided to employees," he said.

"This is fantastic news," said Eric N. Athey, attorney and co-chairman of labor and employment at McNees Wallace & Nurick LLC. "We have many clients for whom compliance will not be much of a challenge; however, several industries and their employees could really be hurt by certain provisions of the law – particularly the 30-hour standard for full-time status. Hopefully, the feds will use the additional year to provide relief for those industries.

Athey noted that there have been of delays involving a number of other PPACA requirements in the past several years, so this one is not a huge surprise.

"However," he said, "I am surprised that they have not delayed implementation of the individual mandate and the January 2014 start date for federally facilitated exchanges – yet."

"Some have commented that the delay allows the Democrats some 'political cover' for the upcoming mid-term elections," Athey added. "However, it's interesting that they have not yet delayed the individual mandate, which is perhaps less popular among Democratic voters than the employer mandate."

Nationally, the reaction was much the same.

"The president's health care law is already raising costs and costing jobs," House Speaker John Boehner said."This announcement means even the Obama administration knows the 'train wreck' will only get worse. I hope the administration recognizes the need to release American families from the mandates of this law as well. This is a clear acknowledgment that the law is unworkable, and it underscores the need to repeal the law and replace it with effective, patient-centered reforms."

The National Retail Federation lauded what it called a wise move.

"The National Retail Federation has worked hard to engage and educate our diverse membership on the upcoming ACA requirements and consistently and empathetically called on the administration to delay these specific regulations," said NRF Vice President and Employee Benefits Policy Counsel Neil Trautwein. "We appreciate the administration's recognition of employer concerns and hope it will allow for greater flexibility in the future."

Initial report

The Patient Protection and Affordable Care Act's employer mandate will be delayed a year to 2015, the Obama administration said in a surprise announcement Tuesday.

"The Administration is announcing that it will provide an additional year before the ACA mandatory employer and insurer reporting requirements begin," Assistant Secretary for Tax Policy at the U.S. Department of the Treasury Mark Mazur wrote. "This is designed to meet two goals. First, it 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."

The employer mandate is the requirement that businesses with 50 or more full-time-equivalent employees offer health insurance that meets affordability and adequacy requirements or pay penalties. It was expected to begin on Jan. 1, 2014.

Formal guidance describing the transition is expected within the week, according to Mazur.

"Once these rules have been issued, the Administration will work with employers, insurers, and other reporting entities to strongly encourage them to voluntarily implement this information reporting in 2014, in preparation for the full application of the provisions in 2015," he wrote. "Real-world testing of reporting systems in 2014 will contribute to a smoother transition to full implementation in 2015."

Continue to check for more updates on this story as they become available.

How are you getting your ACA news?

Stay up to date on the latest health care reform news on our Health Care Reform Resource Center, which gives you the latest headlines every weekday, provides resources to help with your own research, and provides you with the latest blog posts by our award-winning health care reporter, Heather Stauffer.

You can also ask our panel of midstate experts your PPACA questions, and every other month we offer you the opportunity to chat live with one of our experts. Our most recent chat was with Andrew Carter, president of The Hospital & Healthsystem Association of Pennsylvania, who talked about Medicaid expansion.

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