Uncle Sam - Money

Figuring out the penalty some large firms may pay is only one of the hurdles for Obamacare, some say.

By Noam N. Levey and Chad Terhune
July 4, 2013

The Obama administration’s surprise decision to delay penalizing large employers that fail to provide health coverage appears unlikely to unravel the president’s signature healthcare law, despite claims from Republicans that the law’s collapse is imminent.

But the move casts a spotlight on a central dilemma facing the administration as it moves to implement the complex law: Even supporters acknowledge that some of the Affordable Care Act’s provisions may not work as written. But partisan tensions in Washington have made changes all but impossible.

“There just are not a lot of Republicans who are anxious to help the administration fix the law,” said Dean Rosen, a Republican healthcare lobbyist and onetime aide to former Senate Majority Leader Bill Frist. “At the same time, there are not a lot of Democrats who want to engage in anything that might show that the law has flaws. It’s a very tough environment.”

John McDonough, a former Democratic Senate aide who helped draft the health law, noted that “there is scarcely a sentence of the Affordable Care Act that couldn’t be adjusted.”

“It is just a tragedy that the parties cannot get together and get about the business of doing that,” he said.

The so-called employer mandate — a complicated system of penalties designed to keep employers from dropping health coverage — is a prime example of the challenge confronting the White House.

Even some of the law’s supporters say the mandate, though necessary, is one of its more problematic provisions.

It requires a very complex set of reporting for businesses, many of which already are struggling with numerous other requirements. And the mandate itself, which exempts employers with fewer than 50 full-time employees, creates an incentive for some businesses to move employees to part-time work.

This arcane system serves a relatively limited purpose. The vast majority of employers covered by the mandate — more than 94% of them, according to an annual survey by the nonprofit Kaiser Family Foundation and the Health Research & Educational Trust — already provide health coverage. Most are not expected to stop because the benefit helps attract workers and provides businesses a tax benefit.

“The employer requirements could have been structured much better,” said Ken Jacobs, chairman of the UC Berkeley Center for Labor Research and Education.

Yet there has been practically no serious effort in Washington to adjust the mandate since the health law was enacted in 2010.

White House senior advisor Tara McGuinness said Wednesday the administration still does not have any plans to seek adjustments.

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