On the delay of the ACA employer responsibility requirement…

Today, the Obama Administration announced that they would delay for one year the reporting requirement, and thus the enforcement of the penalty, for those employers over 50 workers who have workers getting health coverage on the exchanges like Covered California. The Administration said they listened the businesses that needed more time to comply, and to have more time to come up with a simpler and streamlining reporting system.

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 January 1, 2014. Every person eligible for new help or coverage before this announcement will still get that help starting on day one. Workers who don’t get coverage at work can get insurance from Medi-Cal or Covered California. Nobody lost coverage as a result of this announcement today.

That said, this employer responsibility provision is crucial for the long term–it is meant to stabilize on-the-job benefits that have eroded over the last few decades, especially here in California. One year to phase in the employer requirement work better shouldn’t harm the goals of the Affordable Care Act; but a multi-year delay or disruption could undermine the financing of our health system. While providing a level playing field between employers who do provide coverage and those that don’t, this provision in needed to make our health system sustainable in the long-term, so employers don’t shift the health costs of their workers onto taxpayer-funded programs.

In a statement, Insurance Commissioner Dave Jones makes a similar point: “Over 92 percent of California employers with more than 50 employees already offer health insurance to their employees.  We anticipate that they will continue to do so as they have done so historically 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. Many of them will be eligible for a premium subsidy if they make less than 400 percent of the federal poverty level, which in California is about $94,000 for a family of four.  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.  In the meantime, uninsured workers will be able to purchase health insurance through the California health benefit exchange.”

California has one of the worst rates in the nation of employers offering health coverage to their workers and families. As a result, California voters and policymakers have actively considered proposals to employer-based coverage, including Proposition 166 in 1992 and Proposition 72 in 2004; SB2(Burton) in 2003; and AB880(Gomez) this year. The ACA’s employer responsibility philosophy was reflected in the AB1x1(Nunez/Schwarzenegger) proposal in 2007 and in the currently operating Healthy San Francisco.

Health Access California promotes quality, affordable health care for all Californians.