Employer Mandate Delay Will Have Minimal Effect on Coverage, Study Says

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The Obama administration's decision to delay the Patient Protection and Affordable Care Act's employer mandate by one year to 2015 won't have a significant impact on health insurance coverage, according to a RAND Corporation study.

The delay will result in 300,000 fewer people, or 0.2 percent of the population, having access to affordable health coverage in 2014, RAND analysts found. Under the mandate, 0.4 percent of companies employing 1.6 percent of workers would pay a fine for not offering insurance coverage, according to the analysts.

Under the PPACA, businesses and companies with 50 or more employees are mandated to offer health insurance to those employees or pay a penalty. The rule was originally slated to begin January 2014. However, the federal government has delayed the mandate's implementation to allow more time for simplifying reporting requirements and give the government more time to adapt health coverage and reporting systems.

The RAND analysts' conclusion falls in line with a study released last month by the Urban Institute. That study concluded the mandate's delay would have almost no effect on either the reform's cost or the number of people covered.

The RAND analysis found the federal government will lose $11 billion in revenue due to the delay. Of that amount, $7 billion would have come from penalties paid by companies that don't offer insurance and $4 billion in fines paid by employers who don't offer affordable care.  A full repeal of the mandate would result in a $149 billion loss in federal revenue over the next 10 years, according to RAND.

Similarly, the Congressional Budget Office has estimated the one-year delay will cost the federal government $12 billion, including $10 billion in uncollected penalty payments and a $3 billion increase in exchange subsidy costs. There will also be an increase in taxable compensation because of fewer people enrolling in employment-based coverage, offsetting those cost increases by approximately $1 billion, according to the CBO.

More Articles on PPACA Implementation:
Employer Mandate Delay Will Cost Government $12B, CBO Says
Study: Mandate Delay Won't Affect PPACA Costs, Coverage
IRS Details Delay of Employer Insurance Mandate 

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