In a shocking move, the White House announced Tuesday it is delaying the reform law's mandate that employers provide health insurance coverage for their workers.
The decision to postpone the mandate, which requires companies with at least 50 employees offer health plans or pay fines, by one additional year to 2015 is a major concession to business groups and employers and could have a rippling effect on the health insurance industry.
"We have heard concerns about the complexity of the requirements and the need for more time to implement them effectively," Mark Mazur, an assistant secretary for the U.S. Department of Treasury, wrote in a blog post announcing the delay. "We recognize that the vast majority of businesses that will need to do this reporting already provide health insurance to their workers, and we want to make sure it is easy for others to do so."
Postponing the mandate, however, could mean more people will enroll in health insurance exchanges if employers stop offering health coverage, even if only temporarily. "Essentially for calendar 2014 the act of dropping coverage and dumping employees into the exchanges is on sale," Douglas Holtz-Eakin, president of American Action Forum, told Politico. "Drop and dump, but no penalty."
The Treasury Department, which is responsible for implementing the employer portion of the reform law, will publish guidance on the delay within the next week and will propose official rules later this summer, according to the blog post.