Obamacare’s employer mandate is under attack from both sides. Will it survive?


Former White House Press Secretary Robert Gibbs believes the health law’s employer mandate will be the “first thing to go.” Some of the law’s supporters aren’t so sure that would be a bad thing. (KEVIN LAMARQUE/REUTERS)

Critics of the health care law, including many business owners, have long bemoaned a provision that requires employers to provide health coverage to their workers.

Now, some of the law’s supporters are starting to call for the rule’s elimination, too.

“Repeal of the employer mandate might, in fact, not be such a bad idea,” Timothy Jost, a law professor at Washington and Lee University and vocal supporter of the Affordable Care Act, wrote this week in a column for Health Affairs.

In simplest terms, the employer mandate, as it has become known, requires firms with at least 50 workers to offer affordable, comprehensive health insurance to every full-time worker. If they don’t, they face fines of up to $2,000 per employee.

Supporters note that virtually all large employers subject to the requirement already offer health insurance. Nevertheless, opponents have labeled the rule a job killer, warning that companies will hire fewer workers or even let some go in order to stay below 50, while others will pull back on hours to limit the number of full-time workers they must cover.

Last summer, the administration pushed back the mandate for an additional year, until 2015, saying officials needed more time to implement the provision. Seven months later, they pushed the start date back another year for some mid-sized businesses.

Despite the delays, there’s already anecdotal evidence to support the concerns from critics. Some companies, Jost notes, “have reportedly constrained growth to avoid becoming subject to the mandate” while others have started to “cut the hours of part-time employees to below 30 to avoid having to offer them coverage.”

In light of those consequences, coupled with the logistical problems the mandate is evidently causing for the administration, the voices in favor of dumping the rule are growing louder.

The Urban Institute, a left-leaning policy research group, recently released a report concluding that nixing the mandate would “eliminate labor market distortions in law” and “lessen opposition to the law from employers” while only reducing health coverage across the country by a rather tiny 0.07 percent.

“Without that burden, employers may play more of a role promoting the expansion of coverage under the law,” they wrote — an important selling point as Democrats in Congress look to quiet opposition to the ACA heading into the mid-term elections.

Researchers are skeptical that the small minority of large employees that do not offer coverage will do so because of the mandate; most will simply pay the penalty. A large share of those firms will be employers of low-wage workers.

John Arensmeyer, president of the lobbying group Small Business Majority and another unwavering advocate for the health law, argues that most employers aren’t likely to make hiring and insurance decisions one way or the other based on the mandate. Ultimately, in his view, the rule “isn’t a job killer, but it isn’t a panacea for coverage, either.”

On whether the mandate should be tossed, he said “there are good points on both sides.”

In Jost’s column, he qualifies that the rule should only be thrown overboard if it’s replaced with a more effective, less onerous requirement for employers. An early version of the health care law in the House, for example, would have required firms to instead commit a certain percentage of their total payroll to cover employee health benefits.

Implementation and reporting requirements under that system, Josts argues, “would be infinitely simpler than those required by the current mandate.” In addition, the revised mandate would bring in roughly the same amount of revenue for the government as the current one, according to estimates by the Congressional Budget Office.

Congress, he advised, should consider the percentage-of-payroll approach “as one that could provide widespread benefits and could garner widespread support.”

Still, tossing out the existing mandate, even if in favor of a new one, faces several political hurdles in Washington. Democrats have shot down anything more than minor tweaks to the law, not wanting to acknowledge the statute needs some major repairs. Republicans, meanwhile, aren’t entirely ready to throw in the towel on a full repeal.

But with experts on the left and right starting to question the mandate, and with the law still unpopular but seemingly here to stay, some believe it will only be a matter of time before this particular rule is history — including one former senior White House official.

“I don’t think the employer mandate will go into effect,” Robert Gibbs, Obama’s former press secretary, said during a speech earlier this spring.

In fact, he predicted “it will be one of the first things to go.”

Follow J.D. Harrison and On Small Business on Twitter.

J.D. Harrison covers startups, small business and entrepreneurship, with a focus on public policy, and he manages the Post's On Small Business blog.
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