Delay in Obamacare Rules Stirs Political Cauldron

By Ken Berry
Despite what you may have heard, employers still have to comply with the "play or pay" rules included in the Patient Protection and Affordable Care Act (PPACA). But the government is providing a temporary reprieve from one of the most onerous provisions in the monumental health care law often referred to as "Obamacare." The US Department of the Treasury announced that it won't enforce any penalties until 2015  or one year later than the deadline initially imposed by the law.
In response to pressure from harried employers and business advisors, and perhaps due at least in part to political motivations, the Obama administration announced on July 2 that it is pushing back the enforcement date until January 1, 2015. The decision was especially welcome to employers in certain lower-wage industries  such as restaurants and retail outfits  which have been slow to gear up for compliance and were contemplating cuts in their workforce to sidestep the new rules.
Under the PPACA, an employer with fifty or more full-time employees may be penalized $2,000 per employee failing to provide affordable health insurance to eligible workers. For this purpose, a "full-time employee" is defined as someone working on average thirty or more hours per week. The law includes complex calculations for determining the actual penalty.
How will the one-year delay play out politically? In a posting in the Washington Post on July 2, conservative blogger Jennifer Rubin postulated that this move could backfire for the Democrats in 2014. Here are several reasons she relies on to support her point of view:
  • It reduces the credibility of President Obama, who has steadfastly maintained that the health care initiatives were on track to begin in 2014.
  • It gives Republicans more ammunition for pointing out the detriments of the law. 
  • Republicans will be encouraged to continue efforts to overturn the law in its entirety or wait for it to collapse on its own.
  • American citizens may lose faith in the government's ability to create an affordable and reasonable system for meeting Obama's health care mandates.
  • It may result in an avalanche of calls to postpone the entire law, or at least other parts of the law, for another year or even longer.
  • The delay could tarnish Obama's legacy and lead to further questioning of policies as his second term draws to an end. 
Certainly, some Republication leaders on Capitol Hill were smelling blood in the water. In a prepared statement, Senate Minority Leader Mitch McConnell (R-KY) said, "Obamacare costs too much and it isn't working the way the administration promised. And while the White House seems to slowly be admitting what Americans already know, and what I hear consistently in my travels around Kentucky regarding the regulatory burden on employers, the fact remains that Obamacare needs to be repealed and replaced with common-sense reforms that actually lower costs for Americans."
On the other side of the fence, some political commentators believe the delay will help the Democrats in the midterm elections this November. The reason? They won't have the play or pay deadline lurking right around the corner. In any event, the debate in Washington over health care reform doesn't appear to be ending anytime soon.
Related articles:

You may like these other stories...

IRS audits less than 1 percent of big partnershipsAccording to an April 17 report from the Government Accountability Office (GAO), the IRS audits fewer than 1 percent of large business partnerships, Stephen Ohlemacher of the...
Legislation coming out of Washington just might reduce homeowners' burden for disaster insurance. It's a topic very much on everyone's minds since the mudslide in Oso, Washington. The loss of human life was...
Divorce is hard, and the IRS isn't going to make it any easier. The IRS generally says "no" to tax deductions that might ease the pain of divorce. In certain circumstances, however, you might be able to salvage...

Upcoming CPE Webinars

Apr 22
Is everyone at your organization meeting your client service expectations? Let client service expert, Kristen Rampe, CPA help you establish a reputation of top-tier service in every facet of your firm during this one hour webinar.
Apr 24
In this session Excel expert David Ringstrom, CPA introduces you to a powerful but underutilized macro feature in Excel.
Apr 25
This material focuses on the principles of accounting for non-profit organizations' revenues. It will include discussions of revenue recognition for cash and non-cash contributions as well as other revenues commonly received by non-profit organizations.
Apr 30
During the second session of a four-part series on Individual Leadership, the focus will be on time management- a critical success factor for effective leadership. Each person has 24 hours of time to spend each day; the key is making wise investments and knowing what investments yield the greatest return.