President Barack Obama's decision to delay his health care reform law's requirement that large employers offer health benefits or face financial penalties will result in about a half-million people losing out on health coverage they would have gained, according to nonpartisan congressional analysts.
The 2010 health law seeks to encourage employers to cover workers by mandating that companies with at least 50 full-time employees offer qualifying health insurance or pay penalties up to $3,000 for every person who instead obtains subsidized federal benefits. Earlier this month, the Obama administration postponed these requirements one year, until 2015, which will lead companies to drop or fail to offer health benefits to about 1 million people, around half of whom will find coverage elsewhere, the Congressional Budget Office and the Joint Committee on Taxation conclude in a report issued Tuesday.
The consequences of delaying Obamacare's "employer mandate" include slightly fewer people being covered by health insurance and an increase in federal spending of less than 1 percent: The government won't receive penalty payments from non-compliant companies and will provide more tax credits to people who buy benefits via the law's health insurance exchanges, which open Oct. 1 for coverage that begins Jan. 1, 2014, according to the budget office.
"Roughly 1 million fewer people are expected to be enrolled in employment-based coverage in 2014 than the number projected in CBO's May 2013 baseline, primarily because of the one-year delay in penalties on employers," the Congressional Budget Office and Joint Committee on Taxation reported. "Of those who would otherwise have obtained employment-based coverage, roughly half will be uninsured and the others will obtain coverage through the exchanges or will enroll in Medicaid or the Children's Health Insurance Program, CBO and JCT estimate."
When the Treasury Department announced its decision to delay enforcement of the employer requirements and penalties, experts predicted it would have a minor effect on how many workers got health benefits from their employers and how many people overall would be covered. The CBO/JCT report makes the same assessment.
"Most large employers currently offer health insurance coverage to their employees, and because the delay is only for one year, CBO and JCT expect that few employers will change their decisions about offering such coverage," the report states.
Job-based benefits are the most common source of health insurance in the U.S. and will continue to be after Obamcare's coverage expansion begins next year, the CBO consistently has predicted since 2009, when the Congress introduced the legislation known as the Affordable Care Act. A majority of Americans, or 170 million people, receive health benefits at work. Among employers with at least 50 workers, 94 percent offer health benefits, although not all employees take them, according to a survey by the Henry J. Kaiser Family Foundation.
Republicans have accused Obama of overstepping his authority by postponing the employer rules without congressional action, a charge Obama rejects. The GOP-led House approved legislation this month that would write the delay into law, as well as legislation to delay Obamacare's so-called individual mandate that nearly every American obtain health coverage. The Democratic-majority Senate isn't expected to hold votes on these bills, and the White House has said Obama would veto them.
The employer rules delay also will result in slightly greater costs to taxpayers, according to the report. The report estimates that the federal government will spend $1.38 trillion from 2014 to 2023 to expand coverage to more Americans, $12 billion -- or less than 1 percent -- more than projected before the employer mandate was postponed. The health care law includes spending cuts and tax increases that more than pay for the new costs and reduce the federal budget deficit, the agencies have previously reported.
Most of the increased spending related to the employer-mandate delay, or $10 billion, is due to penalties that won't be paid by companies that don't offer qualifying health benefits, while the remainder is a mix of $3 billion in higher spending on tax credits for health insurance and $1 billion in increased tax revenue from those who don't obtain job-based health benefits, which aren't taxed.
The CBO and JCT also assess the impact of the administration's related decision to relax Obamacare's income-verification procedures for individuals who apply for tax credits or Medicaid benefits based on yearly earnings. Although Republicans have charged this would lead to rampant fraud, the congressional analysts predict "the temporary loosening of verification procedures in 2014 is estimated to have only a small effect" and "will have only a slight impact on the number of enrollees in the exchanges and on the accuracy of their income reporting."
Earlier on HuffPost:
<a href="http://blogs.wsj.com/cfo/2012/07/23/mcdonalds-cfo-sees-up-to-420m-in-new-health-care-costs/" target="_blank">Peter Bensen, McDonald's chief financial officer</a>, said on a conference call last year that Obamacare will cost the company and its franchisees $140 million to $420 million per year. (Photo by Justin Sullivan/Getty Images)
<a href="http://www.huffingtonpost.com/2013/01/16/whole-foods-ceo-obamacare-fascism_n_2488029.html" target="_blank">John Mackey, CEO of Whole Foods, told NPR</a> in January that Obamacare is "like fascism." <a href="http://www.huffingtonpost.com/2013/01/17/whole-foods-fascism_n_2496603.html" target="_blank">He then told HuffPost Live</a> that he regretted making that comparison. (Photo by Mark Wilson/Getty Images)
<a href="http://www.huffingtonpost.com/2012/08/07/papa-johns-obamacare-pizza_n_1752126.html" target="_blank">John Schnatter, CEO of Papa John's</a>, said in August that Obamacare will cost the company $0.11 to $0.14 per pizza. <a href="http://www.huffingtonpost.com/john-h-schnatter/papa-johns-obamacare_b_2166209.html" target="_blank">But he has maintained</a> that Papa John's offers and will continue to offer health insurance to all of its employees. (Photo by Diane Bondareff/Invision for Papa John's International/AP Images)
<a href="http://www.huffingtonpost.com/2012/12/04/cheesecake-factory-ceo-david-overton-obamacare_n_2236673.html" target="_blank">David Overton, CEO of the Cheesecake Factory, told CBS</a> in December that Obamacare "will be very costly" and "most people will have to [raise prices] or cheapen their product" in response. Dina Barmasse-Gray, the Cheesecake Factory's senior vice president of human resources, said in a statement to The Huffington Post: "We have the highest regard for the wellbeing of our staff members, and have offered health insurance to our staff members who work at least 25 hours per week for many years. Because of our long history of providing health benefits, and based on our current analysis of the new requirements, we do not believe the Affordable Health Care Act will have a material impact on us."
<a href="http://online.wsj.com/article/SB10001424127887324392804578358540464713464.html" target="_blank">Boeing lobbied unsuccessfully</a> against a new Obamacare fee, according to the Wall Street Journal. And it is generally concerned about Obamacare's costs. "Boeing agrees with the intent of the Affordability Care Act – to provide increased access to coverage, to improve quality, and in the long run, to help manage the overall cost of the health care system," Boeing spokesman Joseph Tedino said in a statement provided to The Huffington Post in March. "However, while the details and implications of the ACA continue to emerge, the net financial impact to Boeing since the inception of law and for the foreseeable future is negative." (Photo by Tim Sloan/AFP/Getty Images)
CKE (Owner Of Hardee's)
<a href="http://www.businessweek.com/news/2012-09-21/hardee-s-owner-ceo-says-2012-ipo-unlikely-as-costs-rise" target="_blank">Andrew Puzder, CEO of CKE, told</a> Bloomberg Businessweek last year that he plans to respond to Obamacare by selling cheaper meats and hiring more part-time workers. <a href="http://www.newsmax.com/RonaldKessler/Hardee-s-CEO-Obamacare-Puzder/2012/09/20/id/456919" target="_blank">He also told Newsmax</a> he plans to build fewer restaurants in response. (Photo by Erik S. Lesser/Getty Images)
<a href="http://www.huffingtonpost.com/2012/11/15/jimmy-johns-ceo-obamacare_n_2137679.html" target="_blank">Jimmy John's CEO Jimmy John Liautaud told Fox News</a> last year that he plans to cut his workers' hours in order to avoid having to offer them health insurance under Obamacare. "We have to bring them down to 28 hours [per week]," he said. "There's no other way we can survive it."