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InsiderOnline Blog: July 2013

Obama Treasury: Laws Are for You to Follow, Except When We Decide Enforcing Them Is Inconvenient

The Department of the Treasury announced on Tuesday that it would not enforce the ObamaCare employer mandate until 2015. That means businesses won’t have to worry about providing qualifying health insurance to their employees or paying a penalty. But the individual mandate is still in place. Some individuals who were counting on getting qualifying health insurance from their employer may now have to get it from an ObamaCare exchange—or pay a penalty (tax, per the Supreme Court).

The ostensible reason for the delay is that the reporting requirements need to be simplified in order for businesses to comply. If businesses don’t have to report what insurance benefits they provide their workers, the employer mandate cannot be enforced. Further, Michael Cannon argues that ObamaCare’s other provisions won’t work either:

[W]ithout that information on employers’ health benefits offerings, the federal government simply cannot determine who will be eligible for credits and subsidies. Without the credits and subsidies, the “rate shock“ that workers experience will be much greater and/or many more workers will qualify for the unaffordability exemption from the individual mandate. Either way, fewer workers will purchase health insurance and premiums will rise further, which could ultimately end in an adverse selection death spiral. The administration can’t exactly solve this problem by offering credits and subsidies to everyone who applies, either. Not only would this increase the cost of the law, but it would also lead to a backlash in 2015 when some people have their subsidies revoked. [Cato Institute, July 3]

The real reason for the delay is probably the same reason for all the other Obama administration decisions to deviate from the law without authority (at least the seventh such instance, says Cannon): politics. In 2015, another election and another “recovery summer” will have passed, making it politically a safer time to risk job-killing taxes. But what hurts job growth in 2014 will surely hurt job growth in 2015, too. Why not just repeal the whole thing permanently?

Posted on 07/03/13 02:54 PM by Alex Adrianson

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