2014-affordable-care-act-leg-reading-the-tea-leaves-23.jpgIn his annual State of American Business address last week, US Chamber of Commerce CEO Tom Donahue appeared to tone down previous positions favoring total repeal of the Affordable Care Act.  Employee Benefit Adviser magazine reports that Mr. Donahue said “…the Chamber has been working pragmatically to fix those parts of Obamacare that can be fixed,” including the employer mandate to offer health coverage.

But realistically, what are the chances that Congress and President Obama will agree to legislation to “fix” the ACA employer mandate? Read more.

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2014 Affordable Care Act Legislation? Reading the Tea Leaves II

Fri Jan 17, 2014

2014-affordable-care-act-leg-reading-the-tea-leaves-23.jpgIn his annual State of American Business address last week, US Chamber of Commerce CEO Tom Donahue appeared to tone down previous positions favoring total repeal of the Affordable Care Act.  Employee Benefit Adviser magazine reports that Mr. Donahue said “…the Chamber has been working pragmatically to fix those parts of Obamacare that can be fixed,” including the employer mandate to offer health coverage.

But realistically, what are the chances that Congress and President Obama will agree to legislation to “fix” the ACA employer mandate?

Let’s consider four key points:

One, the employer mandate has several design flaws—a mistaken definition of “full-time” employee as averaging 30 or more hours a week; an unusual definition of “large” employer as having 50 or more full-time employees; and a labyrinthine IRC 6056 employer reporting scheme. At a minimum these three provisions must, and will be, fixed.

Two, these and other flawed provisions can only be repaired through legislation, either to repeal or surgically amend the existing statutory language.

Three, legislation to make the necessary changes requires a consensus among Democrat and Republican lawmakers and the acquiescence of President Obama.

Four, the tea leaves tell us that neither Democrats nor Republicans will agree to legislative changes this year. Democrats will oppose legislation that would dramatically alter the President’s signature legislative accomplishment.

Likewise Republicans, betting that voter unhappiness with the Affordable Care Act rollout and cancellation of existing health plans will be an Election Day winner, will not support changes that President Obama and vulnerable Democrats could characterize as “perfecting Obamacare.”

What do the tea leaves predict, therefore, about 2014 and ACA changes? President Obama established an important if controversial precedent last July 3 when he unilaterally delayed the 2014 start date of the employer “play or pay” mandate until 2015.  The decision meant that the White House could interpret its authority under the law to flexibly implement key statutory provisions.

Given point one above, as well as all the rollout difficulties the Administration has encountered with the federal and state insurance exchanges, including too few younger and healthier enrollees in the risk pool mix, the tea leaves tell us that President Obama will once again delay the employer mandate—until at least 2016.

Look for hints of additional delay or flexibility in ACA implementation in the State of the Union address on January 28. The President will acknowledge the government’s missteps in rolling out the federal exchange website and perhaps make some recommendations for building a political consensus for legislative change. If he’s a tea drinker, who knows, he might just try to read the tea leaves!