California says mandate delay won’t affect healthcare exchange

Originally by Chad Terhune for LA Times

The one-year delay announced late Tuesday by the U.S. Treasury Department lifts a requirement that companies with more than 50 full-time workers provide health insurance or pay a fine. Those employer penalties will now go into effect in 2015 instead of this January.

Those requirements were put into the Affordable Care Act to prevent firms from dropping employee coverage and shifting the cost onto the government.
Covered California, the state’s new health insurance exchange, said it remains on track to start enrollment for consumers Oct. 1.

“This has virtually no impact on Covered California and the enrollment of millions of Californians eligible for subsidized coverage,” said Peter Lee, executive director of Covered California.

“This doesn’t change our job. The fact that individuals are eligible for a subsidy or not has nothing to do with whether an employer pays a penalty,” Lee said.

Bryce Williams, managing director of exchange solutions at Towers Watson & Co., a benefits consultant, said this delay allows government officials to sidestep potential complaints among employers and focus instead on the implementation of exchanges for individuals — a centerpiece of the federal law.

“This is intended to decrease complexity and increase the focus on getting the core exchanges up and running,” Williams said.

But some consumer advocates warned the Obama administration not to postpone the employer rules beyond January 2015.

“While a one-year delay won’t have an impact on consumers, the employer responsibility provision is crucial in the long term,” said Anthony Wright, executive director of Health Access, a consumer advocacy group.

Wright said those employer requirements and penalties are necessary “to stabilize a decades-long erosion in on-the-job benefits, provide a level playing field for employers and prevent shifts of health costs onto taxpayer-funded programs.”

Last year, 60% of California firms offered health benefits, down from 73% three years ago, according to the California HealthCare Foundation.

About thebenefitblog

Eric is a Producer at Lockton Insurance Brokers, Inc., the world’s largest privately held commercial broker. Eric has over 23 years of experience in the insurance industry and has spent the last 11 years with Lockton. Eric specializes in Health & Welfare Benefits, Retirement Planning, and Executive Benefits. Eric's clients utilize his expertise in the areas of Plan Due Diligence, Transaction Structure, Fiduciary Oversight, Investment Design, Compliance and Vendor negotiation to improve the operational & financial outcome for each client. The Benefit Blog is a place to share that expertise and industry news.
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