Obama Employer Mandate Delay Train Wreck! Or Not

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You're off the hook for a year. Photo: Jim Watson/AFP/Getty Images

Yesterday evening, the Obama administration announced that it will delay for one year the “employer mandate,” which is the penalty on businesses with 50 or more employees who don’t provide insurance to their workforce. Naturally, this reactivated the Obamacare Train Wreck Doomsaying chorus. This is not Obamacare Train Wreck Doom. It is, however, something real, rather than the usual fever dreams that produce such cries.

Conservatives are calling the employer mandate a “major aspect” of Obamacare, but it isn’t. The individual mandate is a major aspect of the law. The employer mandate is a small aspect. Most businesses with over 50 workers already insure their workforce anyway. You’re looking at regulations affecting about one percent of the workforce.

That’s still enough people to kick up a major fuss, and those employers have been bitterly complaining about the mandate — not just its essential requirement, but also the paperwork involved in complying with it. The administration’s official line is that it’s delaying the requirement for one year in order to design an easier bureaucratic process to implement it.

Nobody seems to think the administration is telling the full truth about this. Even a smoother-designed employer mandate is going to create problems. It creates rigid cutoffs to trigger the penalty, with the 50 employee line and defining “full-time workers” as 30 hours a week or more. Businesses are threatening to shift workers to under 30 hours to avoid the penalty.

Indeed, many health-care analysts would like to do away with the employer mandate altogether. After all, once the health-care exchanges are running, there will be a way for those workers to get affordable insurance on their own rather than through work. It was not projected to bring in any significant revenue anyway. When the Senate first introduced the employer mandate, in 2009, Ezra Klein called it “health-care reform’s worst idea yet.” Austin Frakt and Josh Barro favor repealing it permanently, though Jonathan Cohn thinks it’s not so bad.

Indeed, the conservative complaint has quickly mutated, from “the train wreck is here!” to a complaint about Obama’s usurping power. It is true that the law calls for the employer mandate to start next January, and Obama is unilaterally skirting the law. Obama is “simply ignoring parts of the law that are inconvenient,” complains the Washington Examiner’s Phillip Klein. It’s a “naked display of lawlessness,” says Jeffrey H. Anderson in the Weekly Standard.

Lawlessness. Photo: Dimension Films

It is true that the law calls for the mandate to take effect in January. On the other hand, administrative delays push back deadlines like this all the time. The Supreme Court ordered the Environmental Protection Agency to regulate carbon emissions in 2007, and the Bush White House evaded that order by refusing to open an e-mail from the agency. Obama’s EPA has delayed its carbon regulation for years now, and no conservatives have demanded that Obama act faster.

The question becomes what happens after the delay is up. Ideally, we could just repeal the employer mandate. Major laws are routinely followed by legislative corrections to smooth out their glitches. But conservatives have steadfastly followed a strategy of the worse, the better, refusing to accept any changes to Obamacare short of repeal. The employer mandate was one of the few aspects of the law that seemed likely to produce real, rather than imagined, economic damage, and thus conservatives invested a lot of their train-wreck hopes in this aspect of it.

Former Mitt Romney health adviser Avik Roy, in Forbes, floats the possibility of a lawsuit to force on-time implementation. Conservatives actually hate the employer mandate more than liberals do, but the very fact that this aspect of the law is problematic makes them more eager for it to take effect, so they can argue that the entire law must be repealed.