The number of Americans who receive health insurance through their employer has declined the past decade, from 69 percent in 2000 to 55 percent today. Many smaller businesses no longer provide the benefit. The Affordable Care Act attempts to address the trend, aiming to build on what exists, the employer-sponsored system, and deliver alternatives to those who lose coverage through their work.
That explains the creation of the online exchanges, or marketplace, where individuals can purchase health insurance, many receiving subsidies to help with the cost. It also points to the employer mandate, the requirement that businesses and others with 50 or more workers make affordable coverage available to full-time employees. Employers in this category who fail to provide coverage must pay a penalty, as a check against free riders and as a funding stream to help with subsidies available in the exchange.
In July, the Obama White House delayed compliance with the employer mandate for a year, or until January 2015. On Monday, it pushed back the deadline another year for those companies with 50 to 99 workers. Most companies with 100 or more workers already provide health insurance. The postponement serves employers more likely facing harder choices about the way ahead.
That isn’t to say the White House lacks a political motive. Push back the deadline, and criticism of the mandate eases — in an election year. Yet also at work is what has been evident since passage of the health-care changes: Adjustments will be needed given the complexity and the breadth of the system. And then there are adjustments to the adjustments, or further contending with unintended consequences.
There even may be room for rethinking the employer mandate. The Congressional Budget Office calculated last summer that a one-year delay would mean 1 million fewer people with coverage through their employer. Roughly half would get insurance via the exchanges. The rest would go without coverage, yet their numbers would be far outpaced by the overall count of those with health insurance due to reform.
End the employer mandate, and the exchanges would be stronger, especially as the younger and healthier buy coverage, reinforcing the importance of the other mandate, that individuals obtain health insurance. At the same time, the loss of the employer mandate would mean no revenue from penalties and an increase in the cost of subsidies for the exchanges.
So the moment may not be right for abandoning the employer mandate. Yet the delay does bring attention to the burden carried by many employers. They increasingly are seeking relief, leaving the country, sooner or later, to develop further a sustained and effective alternative.