Even with delay, Obamacare planning crucial

John Hildebrand

A blog on the Department of Treasury website announced a one-year delay on the mandate for businesses that employ the equivalent of 50 or more full-time workers to provide “affordable health care” for those workers.

I found it interesting something as momentous as this was announced by a blog and not a presidential press conference. Barack Obama later came on television to tell us about why it was being done.

In the Treasury blog, the language was about employers having more time to adjust to the idea of providing health care. Employers are encouraged to go further in providing quality health care for their employees and to begin information reporting in 2014 in preparation for 2015. 

In a Washington Post blog by Sarah Kliff, the same information was reported with an additional comment: “That policy has raised concerns about companies downsizing their work forces or cutting workers’ hours in order to dodge the new mandate.”

A Bloomberg blog by Mike Dorning and Alex Wayne was the most detailed and telling. Dorning and Wayne noted that because it postpones the employer mandate until after the November midterm elections, “the delay potentially shields Democratic candidates from a backlash generated by the additional regulations on employers.” Dorning and Wayne also reported that about 94 percent to 96 percent of businesses with more than 50 employees already provide health insurance and have no intention of dropping it. 

Knowing this, it seems the employer mandate was largely unnecessary. The only thing the federal health care law does is substantially increase the cost of providing health insurance for your employees because of all the burdensome reporting now required. This reporting is an enormous administrative expense and extends not only to employees, but also to all dependents.

What many folks might have thought they heard when it was announced the employer mandate was postponed a year was that all of the pending provisions of Obamacare were delayed a year. In no way was that said. The individual mandate remains in effect and will begin to gain traction in January. All of the taxes, fines, penalties and reporting for individuals and families also will be in place. 

As you look at the crafting of this law and how it was sold to the American people, you really need to go back to the debate over a single pay system. The end intention of this law is not to force large employers to insure its work force. More than 90 percent of those workers already have insurance through their employers. The end intention is to grow the federal government substantially larger and more powerful.

The large employer mandate is at its core unfair and discriminatory. If I own a construction company and have 48 employees and you own a competing company and have 52 employees, I enjoy a significant advantage when bidding work. My expenses are lower and yours are higher. 

A law like this will not stand as is. In a very short time, I believe all employers will have to provide health insurance or none will.  I think when it was drafted, the bill intentionally “exempted” most employers so they felt “safe” from the effects of the law. Now that it’s law, adjustments will be made to make it work.

I believe that within three to four years, all employers will have to comply to level the competitive playing field. I think all business owners should plan as if they need to comply with this law and figure out how to live with it.

The reality is neither the states nor federal government are ready to administrate this enormous monster. They don’t have forms, guidelines, offices, personnel or, in the immortal words of U.S. Rep. Nancy Pelosi, a very good idea what is in the law. And if they push the employer mandate out past the midterm elections, Democrats have a better chance at the ballot box. 

Meanwhile, business owners hold their breath and find it hard to make decisions regarding their future. My advice is to plan to play this game to win and start planning now. Don’t wait.