House Panel: We Need Answers from Treasury on Employer Mandate

July 11, 2013 - 5:07 AM
kevin brady

Rep. Kevin Brady (R-Texas) (AP File Photo)

(CNSNews.com) - Following an "eye-opening" subcommittee hearing Wednesday on the Obama administration's decision to postpone the employer health care mandate, Rep. Kevin Brady (R-Texas) said lawmakers need to hear directly from the Treasury Department, which surprised most people when it announced the one-year delay in a July 2 blog.

"Clearly we need to get real answers also from the Treasury Department, and we will do so next week," Brady said at the conclusion of the hearing of the House Ways and Means Health Subcommittee.

Brady said his subcommittee has "serious questions" about how and why such an "alarming decision" was made -- and the effect that the year-long delay granted to businesses will have on other provisions of the law, including the requirement for individuals to purchase health insurance or else pay a tax:

"There are also questions about the unprecedented manner in which it was announced on an obscure Treasury blog site just two days before the 4th of July holiday. We invited Treasury officials to testify today to explain to the American people the rationale for the delay and how they announced this major setback. However, they declined to appear."

Brady called the Treasury Department's announcement "strangely-timed."

"For the last several months, we've heard the White House repeatedly pledge to Congress and the American people that the president's Affordable Care Act will be ready on schedule," Brady, the subcommittee chair, said in his opening statement. "In fact, Secretary Kathleen Sebelius recently insisted before this very committee that the White House would not miss another Obamacare deadline. Not one, not again.

"Shortly thereafter, the nation learned in a blog post of the embarrassing failure by the White House to have this major pillar of the new law in place on schedule. The Treasury Department's announcement confirms our concerns. Obamacare is simply not ready," Brady said.

The Wall Street Journal reported Wednesday that the Obama administration does not have the systems in place for businesses to report all the information the law requires them to transmit to the Internal Revenue Service. That information includes how many full-time employees a company has and how much those employees pay for insurance.

The Affordable Care Act requires businesses with 50 or more full-time employees to provide "affordable" insurance to employees or else pay penalties.

In its July 2 blog, the Treasury Department said it had been "engaging in a dialogue with businesses," listening to their concerns about the "complexity" of the law's reporting requirements -- "and the need for more time to implement them effectively."

It said it would give businesses an additional year, until 2015, before "mandatory employer and insurer reporting requirements begin." But the administration said the individual mandate -- the requirement for all Americans to buy health insurance -- will begin on schedule in 2014.

Brady said the one-year delay doesn't help businesses that are struggling to comply with Obamacare: "The consequences of mandate still remain. Employers are still required to provide government-mandated coverage or pay a substantial tax, (and) many local businesses continue to cut workers' hours and workers' paychecks as they grapple to meet the Affordable Care Act's definition of a full-time employee."

On top of that, health care costs continue to rise, putting jobs at risk.

"If Obamacare isn't ready for businesses, is it ready for my family?" Brady asked.

And if the employer mandate has been postponed, shouldn't the individual mandate -- "out of fairness...be postponed for families and individuals as well?"

Although the White House insists that Obamacare's new health exchanges will be ready to start enrolling uninsured Americans on Oct. 1, "the stunning delay of the employer mandate calls that into question," Brady said.

"Clearly, the rollout of Obamacare is in disarray, and experts are questioning whether the White House is confident enough to administer its own massive health care law."

Brady said the delay in the employer mandate also raises questions about the federal budget: "How much less will the government collect because of the delay? How many more people will end up or be forced into the exchanges? Without employer reporting requirements, how can we ensure subsidies are only going to those without offers of affordable insurance?"

Brady called it "unfortunate" that no Treasury officials were at the hearing to answer those questions. "The American people, Congress and this committee deserve these answers, and we will get them," he said.

"But what we do know is Obamacare is making health care more expensive, costing Americans their jobs, shrinking their paychecks and preventing families from keeping the health care that they have and they like. Instead of simply delaying enforcement of certain provisions of Obamacare, it's clear this law must be repealed."

Obamacare 'largely unaffected by the delay'

Rep. Jim McDermott (D-Wash.), the panel's ranking Democrat, said "there's been a lot of noise on both sides of the aisle" over what the delay means, and "nobody really knows."

"I didn't spend my Fourth of July combing over the implications of the change, and I doubt there's anybody on the dais who did. I'm trying to adjust. And to dissect this plan on the back of a galloping horse before we have a chance to properly consider it is, believe me, unwise."

McDermott expressed surprise that the panel was having a hearing so soon after the Treasury Department announced the delay.

"I'm sure it's tempting for those who have stood against reform and progress from the beginning to see this as a chance to rip Obamacare apart again, yet another time. The irony of objecting to the delay of a program you've been trying to stop is no doubt lost on this room."

McDermott insisted that Obamacare "is largely unaffected" by the delay in the employer mandate: "The employer responsibility requirements are just a piece of that puzzle that make up universal coverage. The marketplace exchanges are on track to open on (Oct.) 1."

He said it's possible that the delay will actually help consumers: "They'll have a chance to have access to the exchanges. Employees who remain uncovered will be able to find assistance through tax credits and other subsidies in the federal marketplace or the state exchange.

"The delay will also give businesses time to adjust and for the community to work with Treasury to work out the most efficient and effective way to comply with the law. For 95 percent of the employers who already offer coverage to their employees, we have every reason to believe they will continue to do so."