Obamacare delay: Will employers drop health care?

Dan Gorenstein Jul 3, 2013

Obamacare delay: Will employers drop health care?

Dan Gorenstein Jul 3, 2013

Most companies with more than 50 employees already offer health insurance to their full-time employees. Those that don’t were going to have to start Jan. 1, as part of the new health care law, or face stiff fines.

Now that’s off. The Obama administration said Tuesday it is delaying the so-called employer mandate for a year.

This news needs a little perspective.

University of Pennsylvania health economist Mark Duggan says there aren’t even that many companies that could face fines in the first place.

“We’ve got six million companies in the U.S. and something on the order of 10,000 companies are 50 or more and not offering coverage. So it’s a tiny fraction,” he says.

But for those companies who don’t offer coverage, health care tax attorney Don Susswein says today is a beautiful day.

“This gives people another year to really find out more, make the decisions they have to make,” he says.

Susswein says this really gives employers time to do the math…to figure out how to offer insurance at the lowest cost to themselves and shift the bulk of the burden to their employees.

“The employers are going to realize for the most part this is not as bad as they thought it was,” he says.

It might not be as bad for some employees either. Individuals will still be required to have insurance starting next year.

But instead of choosing an expensive policy offered at work, Judy Solomon with the Center on Budget and Policy Priorities says they can shop for insurance on the exchanges.

“For some people if they were going to have an offer of coverage that was not as strong or comprehensive as what they could get on the exchange, this delay might actually be helpful,” she says.

In practice the rollback of the employer mandate is small. But Giovanni Colella at Castlight Health says when it comes to perceptions about Obamacare, this could be huge.

“That’s what I’m hearing from everybody. ‘This proves it wasn’t ready.’ Now the question is will it ever be ready,” he says.

We’ll get the first sign of that on Oct. 1st, when the insurance exchanges are scheduled to open.

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