There is a one-year delay in the mandate requiring large employers to provide health insurance to their workers. A Rand study finds that this delay will not significantly hurt the goals of the Affordable Care Act. However, a repeal of the requirement would seriously undermine financial support for the law. The one-year delay announced by federal officials in July means that an estimated 300,000 fewer people will have employer-sponsored health insurance during 2014 and the federal government will collect $11 billion less during the period to help support the Affordable Care Act.
Both of the numbers are small compared to the overall size of health insurance expansion and revenue generated under the Affordable Care Act. However, if the large employer mandate were repealed, revenue would fall by $149 billion over the next 10 years because of lost penalties – about 10% of the total spending offsets being used to support the law.
Under the law, companies with more than 50 workers must offer workers affordable health care coverage or pay penalties. The provision affects a relatively small group of companies because more than 95% of large employers already offer their workers health coverage.
About 1,000 fewer companies – less than 1% of large employers – will offer coverage in 2014 because of the enforcement delay. Once the insurance mandate is enforced on large businesses, an estimated 0.4% of large employers, who employ 1.6% of the nation’s workforce, will pay a penalty for not offering health insurance at all.
An estimated 1.1% of large companies will pay a penalty for offering unaffordable coverage to their workers. These companies employ fewer than 1% of the nation’s workforce. The study, “Delaying the Employer Mandate: Small Change in the Short Term, Big Cost in the Long Run,” is at this address: www.rand.org.
