Behind the Obamacare Delay

Obamacare was signed 3 years ago and was scheduled to start January 1, 2014. On Tuesday July 2, 2013 it was quietly announced that provisions of Obamacare were going to be delayed until 2015. As of July 8, 2013 President Obama has not released a public statement about the change to his signature domestic bill since his return home from Africa; the reason explained by the White House for the delay of provisions is that businesses were simply not ready and needed more time to understand the complexity of the bill. On July 5, 2013 a 606 page final regulation on some of the health care law's most key provisions was released.

The focus of the changed timeline for Obamacare has been the provision concerning the requirement that all businesses with over 50 employees are required to provide their employees with health insurance or else risk a fine of $2000 per employee who is not provided with insurance. Along with the change in date of the provision there has also been a change in how it will be carried out. Originally the Federal Government told the 17 state-based marketplaces that the federal government could handle making sure employers are supplying their employees with health insurance. But now the federal government is claiming they do not have the man power to monitor this, so they are not requiring that states running their own marketplaces to do this check until 2015. Another change to the provisions is that the federal government is scaling back oversight on what applicants say they earn in all 50 states. This is crucial to the Affordable Care Act; originally the Center for Medicare and Medicaid Services said they would audit anyone who reported income that was 10% lower than the income they earned last year. Now, the federal government will only audit a statistically significant number of these people with large income discrepancies, instead of the whole group. With the change to this provision, people can under report their income to gain tax subsidies with less fear of being caught. Also, electronic notices will not be required until 2015. This is due to the federal government's concern that the technology necessary to do this will not be in place.

Rep. Sam Graves, the Chairman of the House of Small Business Committee, said, "Instead of providing relief for businesses, this simply kicks the can down the road" and the National Federation of Independent Business, the nation's largest small business organization, agrees that the extension is only a temporary relief. Small businesses are still unsure of the qualifications necessary to be considered a business with over 50 employees. According to Bruce Phillips, a CPA with Harshman Phillips and a Gold Xero Partner, the delay doesn't do much in terms of clearing up the confusion facing small business owners. Due to the complications of beign considered a business with over 50 employees Phillips says his advice, from an accounting standpoint, for a business with fewer than 50 employees to expand and grow their business without hiring any new staff members. If hiring new employees is too complicated due to health care, how is this going to affect the job market? According to Marco Rubio, the GOP Sen. of Florida, the move was a "remarkable acknowledment by the Obama administration that Obamacare is a disaster in progress that will hurt job creators and those looking for work." Instead of just extending the time for small businesses to understand all of these provisions, why is the government not spending time to simplify them and make businesses feel like they can hire more staff as their business grows?

Congressional Republicans have been united against Obamacare since 2010, and this delay has only verified their opinion. "It brings this debate back to center stage and forces every Democratic senator to explain why they wrote this deeply flawed bill behind closed doors, rammed it through on a party-line vote, and didn't listen to the concerns of millions of Americans," said Brian Walsh, Republican strategist and former communications director for the National Republican Senatorial Committee. Some politicians are thinking this was a political move to help Democrats in the midterm election. Rep. John Fleming a Louisiana Rep. said the White House knew the employer mandate "would hurt them politically."