The Obama administration recently announced a decision to delay the employer mandate, a provision of the Affordable Care Act that requires businesses with 50 or more employees to provide health insurance for their workers or face financial sanctions. While this has been portrayed as a setback, the delay will have little impact on the District. DC’s Health Exchange will be up and running this October ‘ primarily for businesses under 50 employees ‘ and most larger companies already offer insurance to their workers.
In other words, health reform is moving full steam ahead in DC.
The employer mandate required businesses with 50 or more workers to provide affordable insurance to their employees starting in 2014 or pay a fee of $2,000 per employee. Last week, the White House delayed the mandate to January 2015 in order to ease the transition and administrative burden on small businesses.
In the District, the decision will have little effect. The vast majority of businesses with 50 or more employees already offer some type of health insurance. Some 87 percent of private employers with 25 to 99 employees offer health plans, while 100 percent of those with more than 100 employees offer plans, according to a study by the District. This means that the employer mandate is not the most important element of Obamacare for increasing the number of insured DC residents.
Also in 2014, District residents who are not offered insurance through their employer or who have unaffordable employer provided insurance premiums will be able to shop for health plans on the DC Health Exchange as an individual. Through the Exchange, these residents can apply for subsidies and tax credits to make plans more affordable.
Delaying the employer mandate also will not change the number of employers participating on the DC Health Exchange. For the 2014 and 2015 plan years, the Exchange will only sell employer health coverage for small firms, those with under 50 employees, that are not subject to the mandate. In 2016, the definition of small business will expand to less than 100 employees, but by then, the employer mandate will be in effect.
Because of the high rate of employers offering health insurance and the design of the District’s Exchange, last week’s announcement will not derail the District’s health reform efforts at all. While there is always the possibility of other federal delays, the District’s leadership is working aggressively to ensure that the implementation of District specific reforms, including the Exchange, are on schedule.
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