The delay of the employer mandate in Obamacare is designed to improve Democrats' prospects in next year's congressional elections, but it's difficult to see how and it's not promising news for everyone else. Both employers and employees can only worry about what's coming next. They should expect it to be bad. Investments in job creation will be delayed; prudent employers will necessarily put off hiring new workers.
The Obama administration has been playing paste-and-patch with waivers and delays, but there's growing concern, even at the White House, over how the health care takeover will actually work, and whether it will work at all. The delay raises legal questions as well. Section 1513 of the many sections and subsections of the Obamacare statute sets the 2014 start date for the employer mandate. By law, a change should come from Congress, not made by bureaucratic whim.
The administration says it had no choice but to stall, because it isn't ready to deal with the mess it created. "We have heard concerns about the complexity of the requirements and the need for more time to implement them effectively," Mark J. Mazur, deputy assistant Treasury secretary for tax policy, wrote. That's a plausible explanation of what the administration thinks should be done now, but it's hardly reassuring, and it's certainly not the generous favor to everyone that Mr. Mazur tries to make it sound.
The employer mandate is to cover employers who hire 50 full-time employees, but "full time" is defined at 30 hours a week, not the usual 35 hours. Faced with choosing between expensive regulatory compliance or expensive penalties, employers are trying to keep their payrolls below 50 employees. Employers who skirt as close to the line as they can are called "the 49ers." Other employers are cutting back hours. The latest monthly job statistics show that full-time new jobs are down by 240,000 in June, and part-time jobs were up 360,000 jobs, a record. Layoffs and cutbacks aren't exactly the way out of a persistent recession.
The fortunate with jobs face a new quandary. The individual employee mandate is not delayed with the employer mandate, and eligibility for subsidized health insurance through the insurance exchanges depends on an employee being able to prove that the employer did not provide "affordable" benefits. For example, a 28-year-old single, childless adult is required to buy insurance or be penalized by Obamacare, but he can't qualify for a subsidy, and without a subsidy he can't afford insurance. Insurance premiums on the individual markets are expected to soar in many states. Ohio is looking at increases of more than 80 percent, and in California premiums will all but double. The young, working-poor singles will be required to pay significantly more for health insurance or go without and pay a tax penalty, to be collected by the IRS.
The promise of Obamacare was that it would make health insurance both universal and affordable. It was obvious from the beginning that President Obama's scheme, a fantasy of politics and palaver, wouldn't work. The folly of the health care takeover becomes ever more clear with the appearance of the markers for implementation. Robust economic growth is crucial, and Obamacare threatens to make a bad economy much worse. Congress must listen to the whistle of that speeding train bearing down on us, and step on the brakes to avoid the wreck while there's still time.
The Washington Times
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