ObamaCare Employer Mandate Penalties Delayed Until 2015

Barack Obama and Jack Lew

In April, the soon-to-be-retired and chief ObamaCare author Sen. Max Baucus (D-MT) warned that the looming 2014 full implementation of ObamaCare was on track to be a train wreck.  The Administration finally conceded as much on Tuesday when it announced that it will be delaying enforcement of ObamaCare’s employer mandate until 2015.

The Treasury Department confirmed the delay in a blog post ironically titled “Continuing to Implement the ACA in a Careful, Thoughtful Manner.”

Over the past several months, the Administration has been engaging in a dialogue with businesses - many of which already provide health coverage for their workers - about the new employer and insurer reporting requirements under the Affordable Care Act (ACA). We have heard concerns about the complexity of the requirements and the need for more time to implement them effectively.  We recognize that the vast majority of businesses that will need to do this reporting already provide health insurance to their workers, and we want to make sure it is easy for others to do so.  We have listened to your feedback.  And we are taking action.
Accordingly, we are extending this transition relief to the employer shared responsibility payments.  These payments will not apply for 2014.  Any employer shared responsibility payments will not apply until 2015.

So here’s the good news: The disastrous effects of the employer mandate have been pushed back a year.  Employees of Darden, Wendy’s and Taco Bell, Regal Cinemas, and countless other employers can breathe a (short-lived) sigh of relief.  Your employer will not need to cut your hours to under 30 per week to avoid the mandate’s penalties in 2014. The Hudson Institute estimated that the employer mandate will put 3.2 million full-time jobs at risk in the franchise industry alone.

So to put it simply, employers with 50 or more full-time employees will not be subject to the $2,000 to $3,000 penalty per full-time employee for failure to offer ObamaCare-approved health coverage in 2014.  That’s a good thing.

But there are a number of troubling aspects to this decision, too.

- 2014 Mid-Term Elections: As almost every outlet reporting this story has picked up on, this will postpone some of the nastier effects of ObamaCare until just after the 2014 mid-term elections. Former House Speaker Nancy Pelosi (D-CA) infamously stated in 2010 that “we have to pass the bill [ObamaCare] so that you can find out what is in it.”  Now that we’ve learned what’s in ObamaCare, the Administration’s new motto appears to be that we to wait for President Obama to be clear of the electoral process before we can implement it.

- IRS Still On the Hot Seat: Speaking of ulterior motives for the delay, the IRS is responsible for enforcement of the employer mandate.  Is this move supposed to ease the mass outrage that the IRS will have such a powerful role in ObamaCare, and that Sarah Hall Ingram (who oversaw the office at the heart of the Tea Party targeting scandal) is now leading the office responsible for ObamaCare enforcement?

- IRS’s Unconstitutional Regulations: Why did IRS Commissioner Douglas Shulman visit the White House 157 times, and why did his chief of staff make 310 visits? “The implementation of the Affordable Care Act would have been one of the themes, and there could have been more,” Shulman admitted when questioned about the nature of his visits, adding that “the IRS has a major role in the money flows in the Affordable Care Act.”  My suspicion is still that much of this White House discussion centered around how to unconstitutionally implement ObamaCare to ensure that the crucial tax subsidies for exchange coverage would be available in states that refuse to establish one, thereby applying the employer mandate nationwide.  This is the biggest ObamaCare scandal yet to blossom, and its development has just been stunted for a year.

- Executive Nonenforcement Policy: The Obama administration has already taken unprecedented steps in refusing to uphold the executive branch’s constitutional duty to execute the law.  The President does not have the authority to selectively choose which laws he will enforce.  To grant the President this power is to grant a de facto legislative power in the executive branch.  Just as the President alone does not have the power to make law, he does not have the power alone to repeal law. PPACA Section 1513 states that the employer mandate penalties under IRC Section 4980H “shall apply to months beginning after December 31, 2013.”

- ObamaCare Exchange Subsidies Remain: The CBO’s most recent estimate is that the ObamaCare exchange subsidies will come at a taxpayer cost of $1,017 billion over the first 11 years, and $25 billion in 2014 alone.  The employer mandate penalties were estimated to result in $117 billion in revenues over the first 11 years, and $4 billion in 2014 alone.  Will the Obama administration use its imaginary broad nonenforcement powers to cut $4 billion in spending to pay for his ObamaCare exchange subsidies?

- Individual Mandate Remains: You’re not off the hook.  You are still subject to the individual mandate beginning January 1, 2014.  In other words, when ObamaCare forces your company to drop its employer-sponsored group health plan, you have to go to the ObamaCare exchange for coverage just to keep the IRS off your back.  That is, unless our benevolent leader announces another nonenforcement edict.

Where We Stand

We’ve lost the Constitutional process, insurers are still abandoning the ObamaCare exchanges in droves, premiums continue to rise, the CBO estimates promoted at the time of ObamaCare’s passage do not bear any resemblance to reality, and we’re all still required by law to purchase ObamaCare-approved coverage as of 2014.  Yes, the employer mandate penalties have been pushed back until 2015, and that means countless full-time jobs have been saved for the time being.  But the ObamaCare train is still certain to wreck.

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