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Small businesses receive second extension for ACA's employer mandate

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Small businesses won't have to comply with the employer mandate until 2016.
Small businesses won't have to comply with the employer mandate until 2016.

The Obama administration announced Monday that employers with 50 to 99 employees won't have to provide health insurance until 2016, in the second delay for the “employer mandate” of the Affordable Care Act.

Employers with more than 100 workers will have to comply in 2015. The administration had already delayed until then a mandate which was supposed to have taken effect Jan. 1, 2014.

Employers with fewer than 50 employees do not have to provide health insurance under the ACA. Larger employees will have to either offer coverage to full-time employees or pay fines of about $2,000 per employee.

The delay led to renewed criticism from Republican opponents of the ACA and continued calls that the government also postpone the "individual mandate," which required most Americans to get health insurance this year.

The government said the change is an effort to help employers prepare for the 2010 health care law. Republicans are widely expected to make the continued pattern of ACA glitches a major issue in the 2014 mid-term Congressional election, starting with the troubled rollout last October of the ACA's exchange, Healthcare.gov, where individuals are buying government-subsidized policies from insurance companies.

The Treasury said that companies with 50 to 99 employees accounted for 7 percent of the private-sector work force, while businesses with 100 or more workers accounted for 66 percent. Most companies with 100 or more employees already offer health benefits to at least some of their workers. Small businesses with fewer than 50 employees account for nearly 28 percent of private-sector employees but 96 percent of all private employers, the Treasury said.

Mark Manigan, a health care attorney with Brach Eichler in Roseland, said "the uncertainty the Affordable Care Act has created in the insurance markets has left health care providers scrambling to develop and implement new strategies to grow, if not survive. The administration's latest ad hoc delay in implementation of the law adds to this uncertainty and makes it harder for providers to plan for the future."

Linda Schwimmer, vice president of the New Jersey Health Care Quality Institute praised the extension because the execution of the employer mandate is crucial and must be done right.

"I would rather have them get it right, even if it means that they have to scale it back and start smaller," Schwimmer said.

She said the delay in implementation "demonstrates that health insurance and changes to these laws are just way more complicated than the federal government anticipated. If this makes it so the rollout will be better, then it's the smart thing to do."



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