Human Services

ACA and Employer Mandate Back in National Spotlight

On Thursday, the U.S. House passed a bipartisan measure to restore the definition of full-time work to 40 hours instead of 30 under the Affordable Care Act’s employer mandate. Meanwhile, the Supreme Court is gearing up to consider a legal challenge in King v. Burwell that could eliminate the employer mandate in the majority of states.

If passed by the Senate and able to survive a veto threat, Thursday’s measure in the House would directly impact companies across the country subject to the ACA’s employer mandate. The employer mandate, which partially went into effect January 1st for businesses with 100 or more full-time workers, requires employers to provide affordable health insurance to employees or face penalties. Projections released earlier this week from the nonpartisan Congressional Budget Office estimate that businesses would escape $54.7 billion in penalties over the next decade were the measure enacted into law:

aca-law

Under the ACA, the employer mandate was supposed to go into effect starting in 2014 for all businesses with 50 or more employees. In July 2013, the administration announced a 1 year delay of the employer mandate, pushing implementation to 2015. Then, in February 2014, the administration announced another delay, giving businesses with between 50 and 99 employees until 2016 to comply, and lowering some of the requirements for businesses with 100 or more employees. While less than 5 percent of businesses are subject to the mandate, those businesses employ roughly 72 percent of Americans working at companies.

Movement in Congress comes as a legal challenge currently being briefed before the Supreme Court is underway. The challenge, King v. Burwell, has sweeping implications for the employer mandate, and relates to the availability of subsidies in states that did not establish their own exchange. Due to various mechanisms in the ACA, and how it calculates penalties, businesses in the 34 states with a federal exchange would be exempt from the employer mandate should the Supreme Court agree with challengers.

Oral arguments in the case are slated for March 4th.

 


In Depth: Human Services

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