Jul 3rd 2013
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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.