(NBC NEWS) -- The Obama administration's surprise delay
in requiring bigger employers to provide health insurance to workers
won't affect too many Americans, experts say -- and many of those
workers may find better insurance on the new health exchanges anyway.
2010 health reform law requires anyone employing 50 people or more
fulltime to provide a certain level of health insurance, or pay an
annual penalty of $2,000 per worker. Critics of the law said it would
hurt job creation by discouraging smaller businesses from expanding.
Some also said employers would push more workers into part-time status
to avoid having to pay.
The Treasury Department put the
requirement on ice Tuesday afternoon, saying it would delay the
paperwork requirements for a year.
"I think it came as a bit of a
shock to everybody," says Timothy Jost, an expert in health law at
Washington and Lee University School of Law in Virginia. But Jost and
other experts agreed that the delay wouldn't change expectations for
very many people. One survey from the Kaiser Family Foundation suggests
that only about 13 million people are employed fulltime and yet lack
"It's not going to affect much," says Caroline
Pearson, vice president for health reform at consultant Avalere Health.
"I think the administration is really trying to show flexibility to help
employers who were very concerned about the reporting requirements."
health insurance exchanges are still on schedule to start enrolling
people who want to buy personal health insurance on October 1, offering
benefits on January 1. And the individual mandate - the requirement that
most people get health insurance somehow or pay a small fine -- still
goes into effect Jan. 1.
Most large employers - 98 percent of them
- already provide health insurance to workers. More than half of
Americans, or 160 million people, get their health insurance through an
"The vast majority offer insurance that is both affordable and adequate," Jost says.
law's changes targeted mostly small and medium-sized employers,
including restaurants and some retail outlets, that didn't provide
"A lot of the big employers that don't want to provide
health insurance to their workers are the big national chains that have
young, healthy workers," Jay Angoff, former director of Consumer
Information and Insurance Oversight at the Health and Human Services
Department, told NBC News.
The good news for these workers, Angoff
says, is that they are low-paid and likely eligible to get federal
subsidies to buy health insurance on the state exchanges. "As long as
they have that alternative, I don't think it is so terrible," he said.
had been expected all along that some employers that employ very
low-wage employees would find their employees better off on the
exchanges," Jost said in a telephone interview.
The law would make
employers demonstrate how many workers they had, whether they have
health insurance and, if so, where they get it. It was really
complicated, says Pearson. "Employers do need a bit of time to adjust
their system to keep track of this," Pearson says.
would apply only if workers had no insurance or had to go to the new
state exchanges to get it, and not if the employees instead got coverage
through Medicaid, the state-federal health insurance plan for the poor,
"It is to be hoped, moreover, that employers who have
been claiming that they have to reduce their employee's hours of work to
below 30 to avoid the penalties will restore the lost hours, and small
employers fearful of growing over the 50 fulltime employee threshold
will focus on growing their businesses rather than worrying about the
ACA (Affordable Care Act)," Jost added in a blog post.
the extra year is what is needed to reduce anxiety and build confidence
in the business community in the workability of the law."
Not everyone agrees. Republicans took the opportunity to say the delay shows the administration cannot implement the law smoothly, and renewed their calls for repeal.
the Obama administration is putting off this job-killing requirement on
employers, but not individuals and families, shows how deeply flawed
the president's signature domestic policy achievement is," said Utah
Sen. Orrin Hatch.
"This further confirms that even the proponents
of ObamaCare know it will hurt jobs, decrease economic growth and make
it harder for families to have access to quality and affordable health
care," added House Majority Leader Eric Cantor, a Virginia Republican.
Douglas Holtz-Eakin, health policy expert at the right-leaning
American Action Forum, said it would cost money in the end. "At a
minimum, the federal revenue from fines is gone," he said in a
statement. "More realistically, the costs of already-bloated insurance
subsidies will escalate and the red ink will rise."
And Michael Tanner of the libertarian-leaning Cato Institute says the decision benefits employers at the expense of workers.
the individual mandate remains in place, workers may now face a
situation where they must purchase their own insurance or pay a penalty
because their employers don't provide coverage. In effect, the
administration's decision shifts the cost from employers to workers," he
said in a statement.
Maggie Fox, Senior Writer, NBC News