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By Richard Kirsch, originally posted on Next New Deal

Workers won't be denied coverage because of the reporting delay, but they may not want to give up the insurance they get through the exchanges come 2015.

In my post last week, after the announcement that the employer mandate would not be enforced for a year, I wrote that it was vital that the Obama administration show as much concern for the workers who might be denied health insurance as it did for employers. Specifically, I asked the administration to make clear that a worker would be able to get subsidized health coverage through the new exchanges based on filling out an application, without having to get proof from an employer. On Friday, HHS issued that ruling.

The decision not to enforce the employer mandate for a year is certain to cost some people health coverage as some employers decide to postpone complying with the law. Their workers, possibly also confused by the delay, may not apply for subsidized coverage. But if they do apply, the new ruling will be a big help to them.

As noted, the HHS ruling made it clear that the exchanges should rely on the information workers provide rather than proof from their employers. Workers can ask their employer to help provide the information, but that is not a requirement. And the exchanges can try to verify the information if possible, but that will be difficult and again is not a requirement. Under the new ruling, a worker who reports that he or she is not offered affordable health coverage at work will qualify for subsidized coverage. (Affordability is measured by the employee share of premiums being no more than 9.5 percent of their income.)

The HHS announcement is an important measure to help get coverage to uninsured workers. Of course, it has received little attention compared to the news about the employer mandate. That news is almost always reported incorrectly, with most articles saying that the mandate itself has been postponed for a year. What has been postponed is the enforcement of the mandate through penalties for employers that do not comply. It’s still the law that large employers are required to offer affordable coverage. But if they don’t, there will be no penalty.

There’s one more potentially interesting twist to this story, one that could provide real benefit to some workers in 2014 and then highlight a big problem with the employer mandate in 2015. Workers who get health insurance through the exchanges will get coverage that is much more affordable – lower premiums and out-of-pocket costs than health insurance offered by employers. This will be particularly true for the low-wage employers most likely to not offer coverage. As a result, workers who get coverage in 2014 in the exchange may find in 2015 that they are forced to get coverage that is much more expensive to buy and use, and covers fewer health services, from their employers. The workers will want to stick with the exchanges, putting pressure on employers to pay a fine and let the employees stay in the exchanges, or to improve the coverage they offer.

We are likely to see a lot more debate about how to reform the employer mandate in Congress this year and next as the ACA is implemented. In a future post, I’ll describe ways to change the employer mandate to make good health coverage more affordable for workers. 

Richard Kirsch is a Senior Fellow at the Roosevelt Institute, a Senior Adviser to USAction, and the author of Fighting for Our Health. He was National Campaign Manager of Health Care for America Now during the legislative battle to pass reform.


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Comment Preferences

  •  Employers Are Going More And More To (1+ / 0-)
    Recommended by:
    LilithGardener

    temporary workers thru contracting firms.  Employers are going to find a run around on coverage for their employees.  High wage workers will still be offered employee insurance because companies will want to keep their specialized workers.  The President is doing the right thing by getting more people to sign up for the exchanges right now.  If there are millions who get insurance thru the exchanges by 2015 employers will demand that congress fixes the problem of employer mandate on covering their employees.  Full time could be lowered to 20 hours which would never happen, but should.  Also, the amount of employees to have to provide coverage could change to 100 or more which would help small businesses.  Those employees could go to the exchanges which will offer better coverage.  Of course the real answer is single payer or Medicare for all.

    "Don't Let Them Catch You With Your Eyes Closed"

    by rssrai on Tue Jul 09, 2013 at 08:16:41 AM PDT

    •  I would like to see the employer mandate (0+ / 0-)

      reformed to allow any employee who has been ensured in the exchanges to refuse the company plan.

      E.g. Someone is laid off from job X where they had a good policy, makes all their COBRA premiums, then seeks insurance on their state exchange. They get offered a job in a different state which comes with a really shitty plan.

      That employee should have the option to remain on their prior exchange plan, even if they have to move to a new state to start the new job.

      Then employers have to meet the mandate (whatever it is reformed to be) based on how many of their employees actually opt to enroll in their accept their plan. The penalty should go back to the state where the employee is insured.

      That would provide some incentive for states to offer good value in their exchange and an extra discouragement for employers to even consider crappy plans.

      "They did not succeed in taking away our voice" - Angelique Kidjo - Opening the Lightning In a Bottle concert at Radio City Music Hall in New York City - 2003

      by LilithGardener on Tue Jul 09, 2013 at 09:11:32 AM PDT

      [ Parent ]

  •  Spot-on. (2+ / 0-)
    Recommended by:
    jfromga, LilithGardener

    What's delayed is the penalty. Workers whose employers don't provide affordable coverage will still be able to get low-cost insurance through the exchange, which is actually a win -- more people in the exchange makes it more affordable for those on exchange plans who don't qualify for subsidies. And those who do will still see their insurance costs capped at an affordable rate.

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