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Wednesday, September 28, 2016

Workers won’t be denied coverage because of the reporting delay, but they may not want to give up the insurance they get through the exchanges come 2015.

In my post last week, after the announcement that the employer mandate would not be enforced for a year, I wrote that it was vital that the Obama administration show as much concern for the workers who might be denied health insurance as it did for employers. Specifically, I asked the administration to make clear that a worker would be able to get subsidized health coverage through the new exchanges based on filling out an application, without having to get proof from an employer. On Friday, HHS issued that ruling.

The decision not to enforce the employer mandate for a year is certain to cost some people health coverage as some employers decide to postpone complying with the law. Their workers, possibly also confused by the delay, may not apply for subsidized coverage. But if they do apply, the new ruling will be a big help to them.

As noted, the HHS ruling made it clear that the exchanges should rely on the information workers provide rather than proof from their employers. Workers can ask their employer to help provide the information, but that is not a requirement. And the exchanges can try to verify the information if possible, but that will be difficult and again is not a requirement. Under the new ruling, a worker who reports that he or she is not offered affordable health coverage at work will qualify for subsidized coverage. (Affordability is measured by the employee share of premiums being no more than 9.5 percent of their income.)

The HHS announcement is an important measure to help get coverage to uninsured workers. Of course, it has received little attention compared to the news about the employer mandate. That news is almost always reported incorrectly, with most articles saying that the mandate itself has been postponed for a year. What has been postponed is the enforcement of the mandate through penalties for employers that do not comply. It’s still the law that large employers are required to offer affordable coverage. But if they don’t, there will be no penalty.

There’s one more potentially interesting twist to this story, one that could provide real benefit to some workers in 2014 and then highlight a big problem with the employer mandate in 2015. Workers who get health insurance through the exchanges will get coverage that is much more affordable – lower premiums and out-of-pocket costs than health insurance offered by employers. This will be particularly true for the low-wage employers most likely to not offer coverage. As a result, workers who get coverage in 2014 in the exchange may find in 2015 that they are forced to get coverage that is much more expensive to buy and use, and covers fewer health services, from their employers. The workers will want to stick with the exchanges, putting pressure on employers to pay a fine and let the employees stay in the exchanges, or to improve the coverage they offer.

We are likely to see a lot more debate about how to reform the employer mandate in Congress this year and next as the ACA is implemented. In a future post, I’ll describe ways to change the employer mandate to make good health coverage more affordable for workers.

Richard Kirsch is a Senior Fellow at the Roosevelt Institute, a Senior Advisor to USAction, and the author of Fighting for Our Health. He was National Campaign Manager of Health Care for America Now during the legislative battle to pass reform.

Cross-posted from the Roosevelt Institute’s Next New Deal Blog

The Roosevelt Institute is a non-profit organization devoted to carrying forward the legacy and values of Franklin and Eleanor Roosevelt.

Photo: US Mission Geneva via Flickr.com

  • Dominick Vila

    ACA will not work without the mandate to force free loaders to get insurance coverage. Subsidizing the irresponsibility of those who prefer ER freebies is not the way to go. We either go with a 100% single payer system or support Obamacare. The current system rewards irresponsibility, it is the most expensive medical system in the world, and its exclusions defy humanity and reject Christian values in favor of overt materialism.

    • Howard15

      Perhaps we should get the employers completely out of the health insurance business. Maybe all of us should go to the exchanges for our coverage. The employers could raise our salaries to help us pay for the coverage if they wish as a job retention tool or we could set up a special health care tax for large employers to keep the premiums down on the exchanges.
      Ultimately we need a single payer system if we are serious about cost containment but we will need the House a supermajority in the Senate and Democratic President for that to happen.

  • Catskinner

    “…Workers won’t be denied coverage because of the reporting delay, but they may not want to give up the insurance they get through the exchanges come 2015. …”

    Why not? Everybody else is having to give up their insurance because of this legislation.

    • Howard15

      I am not having to give up my insurance. What are you talking about?

      • Catskinner

        Maybe you’re a United Auto Worker, or you work for a public entity.

        • Howard15

          Neither, never have worked for a union and could not afford to be a govt employee. I am a Financial Planner for a Fortune 500 company. My corporation indicated over a month ago that they did not anticipate any significant changes to our health plan in 2014 and hoped that for the 3rd year in a row our premiums would remain the same. I am sorry if your employer has decided to cancel your coverage. The good news is that you and your family will now be able to go to a competitve exchange and purchase affordable health insurance even if you have a preexisting condition. That is huge and we as Americans will no longer be beholden to our employers when it comes to our health care. Have a nice day.

          • Catskinner

            How? There’s a buffoon in the oval office.

          • Howard15

            You are in the oval office?

          • Catskinner

            If I was, we wouldn’t be having all of these scandals.

          • Sand_Cat

            If there were any honest GOPers in Congress we wouldn’t be, either.

          • Sand_Cat

            More like there’s one commenting on this thread.

  • Allan Richardson

    This is a good attempt at clearing up the misconceptions, while pointing out what is still uncertain. If an employee already HAS coverage through an exchange for 2014, and their employer offers (possibly more expensive and less beneficial) insurance in 2015, does the law forbid the insurance company currently providing the individual policy to cancel it, or refuse to renew it? If people who buy their own insurance next year and find it to be BETTER for them than the offer their employer eventually makes, why not allow them to keep it? That would be the “free market” proof that the system works.

    Health insurance should not HAVE TO BE provided by employers in the first place; that is a “precedent” dating from World War II and postwar days when labor was temporarily in short supply, so it became a recruiting tool to offer insurance. Because most of the available and affordable insurance for working-age families is employer-provided (via the “group” policy) even if the employee actually PAYS for all or most of it, employers have the ability to (1) threaten employees with loss of health care AS WELL as loss of income in case of layoff, (2) prevent talented would-be entrepeneurs from starting their own businesses for fear of their families’ health insurance being lost, and (3) control the health care choices of their employees according to the BOSSES’ religious beliefs. And the extra “burden” employers mention, in the case of manufactured goods that have to compete with foreign made products (whose countries include health care as a PUBLIC right), makes our own products less competitive in the world market.

    The Veterans’ Administration health system and the military (Tricare) health system WORK, and work more efficiently than private insurance; Medicare (DESPITE fraud committed by business owners who later become governors of states) works more efficiently than private insurance. Since health care is the one line of insurance that insurance companies would rather NOT be in, judging from their complaints over the years, why not replace Obamacare, AFTER it is accepted by people who were against it before they were for it, with universal Medicare? Rather than WASTING federal tax money, it would SAVE it by spending it more effectively, as the governments of OTHER countries do. For most people, any POSSIBLE increase in taxes would be LESS than their personal share of medical insurance, plus co-pays, plus deductibles, plus raises in gross wages resulting from employers competing on WAGES to get good workers.

    And the malpractice “crisis” could be alleviated by having a single payer, who would be able to treat the majority of cases on a “no fault” basis, while keeping statistics on good and bad doctors, and have the authority to REMOVE the licenses of bad ones and, if necessary, criminally prosecute them. Oops, I just gave bad doctors a reason to oppose it, didn’t I?

    • Howard15

      Well said except that for a plan tpo qualify as a group plan the employer must pay at least half of the premiums for their W2 employees.