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Obama administration delays health insurance mandate until 2016 for midsize employers

February 10, 2014 at 6:09 PM EST
The Obama administration announced that mid-sized businesses would get an additional year before being required to provide health insurance to its employees. Alex Wayne of Bloomberg News joins Judy Woodruff to explain the impetus behind the surprise delay, the reaction of the business community and how the decision affects workers.
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JUDY WOODRUFF: The health care law’s mandate for midsize and larger employers was originally supposed to take effect this year. Now, in a surprise move, the Obama administration has decided to delay part of that mandate for a second time. Midsized businesses get another year before facing a penalty. And the government is easing the requirements for large companies as well.

It’s also prompting renewed criticism from Republicans like House Speaker John Boehner who argue the individual insurance mandate should also be repealed.

Reporter Alex Wayne follows all this for Bloomberg News, and he joins us again.

Welcome back to the program.

ALEX WAYNE, Bloomberg News: Thanks.

JUDY WOODRUFF: So spell out exactly what these changes are that were just announced a couple of hours ago.

ALEX WAYNE: Sure.

So companies that employ between 50 and 99 workers now don’t have to worry about this mandate that they provide health insurance coverage at all until 2016. Companies that employ 100 people or more will have to comply with the mandate starting next year in 2015, but they only have to cover 70 percent of their workers in 2015.

JUDY WOODRUFF: So here it is early February. We thought all this was coming. Why did the administration make the change?

ALEX WAYNE: So they were under a lot of pressure from business groups, trade associations and lobbying groups, to give these companies a lot of notice before any rules were set in stone, so that they have as much time as possible to prepare. And that is why they released them now, so that these companies have the rest of the year to prepare for these changes and make whatever changes they need to make to their own health benefits programs.

JUDY WOODRUFF: Was there a hint that this was coming?

ALEX WAYNE: Not much. We knew that they were working on this regulation. We knew it was going to come out early in the year.

We didn’t know really that they were going to make these broad changes to really the letter of the law. I think it caught a lot of the town by surprise.

JUDY WOODRUFF: Do we know how many businesses are affected by this, whether they’re the big ones or the medium-sizes ones?

ALEX WAYNE: Different numbers going on.

The administration says that 96 percent of all U.S. businesses aren’t affected by the mandate at all. They are too small. They’re under 50 workers.

JUDY WOODRUFF: Fifty or fewer.

ALEX WAYNE: Right, you don’t have to cover any of your workers if you employ that number of people.

But about only 30 million Americans work for companies that small. So, given the rest of the population, most Americans are working for companies that are going to have to provide health insurance at some point.

JUDY WOODRUFF: And what do you — I mean, clearly, Republicans are being critical, saying the president should extend this to the individual mandate to repeal that. Do we know, is it too soon to know who likes this, who doesn’t like it?  What are you picking up?

ALEX WAYNE: Business groups are very happy about it. They were actually surprised, pleasantly surprised. They weren’t expecting this much flexibility really, so no complaints there. Republicans, as you said, think that all of these allowances for companies should be extended to regular Americans.

I think it’s hard to disconnect this from the election calendar too. The congressional elections are coming up in November. And this change is going to mean that a lot of small businesses that would otherwise have to be figuring out how to change their benefits programs in the fall to comply with Obamacare don’t have to worry about it.

JUDY WOODRUFF: So what is your — I mean, you have been reporting on this nonstop for months.

ALEX WAYNE: Yes.

JUDY WOODRUFF: Is it your sense that there could be still more changes to come?  Do you think this is the last in a series of changes we’re going to see?  How do you read how the administration is dealing with it all?

ALEX WAYNE: Honestly, it’s hard to guess at this point. They seem to make changes as problems arise in order — I suppose the administration would say they’re trying to be pragmatic and they’re trying to deal with issues that are brought to their attention.

In this case, they got a lot of comments from the business community about this set of rules in particular. If we’re talking about the individual mandate, I wouldn’t expect many changes before the end of the year. I think people are still going to have to comply with that.

JUDY WOODRUFF: Give us a flavor, Alex, of what businesses were saying. What were they saying and how were they saying it to the administration?

ALEX WAYNE: Right.

Well, the how is they were lobbying them. And the way that is done with the administration in Washington is you write letters to the administration, essentially, laying out your viewpoint. But the things that they wanted were more flexibility, more time, in a nutshell. They wanted to cover fewer workers. For instance, there’s been a lot of concern about covering part-time workers and people right at this threshold of 30 hours.

Another break they got today, they won’t have to cover seasonal workers, people who work six months or less per year. That’s another ask from business. They pretty much got a lot of what they wanted here.

JUDY WOODRUFF: And — but the administration had been talking to them about what changes to make?  I mean…

ALEX WAYNE: Oh, sure.

JUDY WOODRUFF: There were conversations?

ALEX WAYNE: Oh, absolutely.

There’s — there’s — I don’t want to call it an open-door policy for the administration and business groups, but if you are a large business group in town, somebody like the National Retail Federation, the Association of Manufacturers, the Chamber of Commerce, you can get in the door at the Treasury Building or in the White House itself, and you can have your voice heard.

JUDY WOODRUFF: So just in a nutshell, to wrap this up, Alex Wayne, what — who are the folks out there then who won’t get coverage as soon as they thought they were going to?

ALEX WAYNE: So, if you are a worker of a company that employs between 50 and 99 people, and your company doesn’t cover — doesn’t offer insurance right now, they’re probably to the going to offer it next year either. So you should probably prepare to go seek coverage on your own.

JUDY WOODRUFF: Those are the main folks?

ALEX WAYNE: Those are the main folks.

JUDY WOODRUFF: And then — and perhaps some of the larger companies as well?

ALEX WAYNE: Yes.

JUDY WOODRUFF: All right, Alex Wayne with Bloomberg News, thank you very much.

ALEX WAYNE: Thank you.

JUDY WOODRUFF: Appreciate it.