Filed Under:Health Insurance, Individual Health

Does the PPACA delay signal the end of Obamacare? Not really

(AP Photo/J. Scott Applewhite)
(AP Photo/J. Scott Applewhite)

The Obama administration's decision on Monday to delay the employer mandate provision of PPACA by a year, to 2015, took many in Washington and the health insurance industry by surprise. While opponents and supporters of the health care law have been quick to draw their own conclusions as to what the delay really means, what are legal experts saying about the delay?

Proskauer, an international law firm which advises employee benefit managers at major firms, summed up its views on the delay in comments it is currently using to advise its clients.

“The prospect of a delay in implementation of penalties is welcome relief to employers that are working their way through very complex rules,” the Proskauer lawyers said. “It is also not unexpected given the complexity of the rules and short compliance time frame."

Proskauer added that it does not appear that the penalties on individuals have been delayed as well. That could mean that individuals face penalties for not obtaining coverage whereas employers do not face penalties for failure to offer coverage. It remains to be seen if this will be clarified, Proskauer said.

Why would Treasury be the ones to authorize a delay? John McGowan, a benefits partner at BakerHostetler, explains that the announcement to delay the implementation of the employer mandate, which was authored by Treasury Assistant Secretary for Tax Policy Mark Mazur, focuses on how the tax penalties would be administered, and what employers must do to provide information to the IRS.

“Given that the Treasury Department alone made the announcement, it does not look like an attempt to float an idea, or signal the start of a general retreat from implementing the Affordable Care Act,” McGowan said.

“It also highlights the challenges the IRS faces, as the agency charged with assessing, collecting —  and enforcing —  the tax penalties that non-compliant employers will face under the Affordable Care Act," McGowan said. "A fair reading of the applicable sections implies that the IRS recognizes that it can’t or won’t be able to collect the information it needs, and that it won’t have the systems in place to make sense of any information it does obtain, to enforce the new tax penalties.”

He added there is nothing in the Treasury’s statement that suggests the Administration is pulling back from the individual mandate, the cornerstone of the ACA, or from the implementation of public exchanges.

For more exclusive coverage on the PPACA delay, see:

PPACA critics pounce on employer mandate delay

Employer mandate delayed until 2015

Obama grants his own waiver

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