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Employer Mandate Delay – The Impact?

Employer Mandate DelaySo what is the big deal with delaying the Affordable Care Act’s employer mandate for one year? How many people will not have access to employer-based coverage as a result? How many businesses would be paying a penalty for not offering affordable coverage to their workforce?

All good questions — and one new study attempts to provide a few responses.

According to the RAND Corporation, a nonprofit research organization, implications from delaying the employer mandate may be as follows:

  • About 1,000 fewer organizations will offer health coverage in 2014 (about 0.02% of all organizations within the U.S.)
  • 300,000 fewer people will have access to affordable insurance in 2014
  • Only about 0.4% of organizations who employ approximately 1.6% of the workforce will pay a penalty for not offering health insurance at all
  • An estimated 1.1% of organizations will pay some penalty for offering unaffordable health coverage (based on current employer contribution rates). This will affect less than 1% of the workforce
  • Due to the one-year delay, the federal government will receive $11 billion less in revenue

RAND also estimated that repealing the employer mandate entirely would result in federal revenue being reduced by about $149 billion over the next 10 years.

Giving employers one more year to digest the employer mandate is considered by many employers to be a welcome relief. However, this delay does prolong the uncertainty in which employers must operate while confronting the Affordable Care Act.

Here in Iowa, over 95 percent of employers who have at least 50 employees already offer health coverage so the impact of this delay affects a small number of the employer population.

Percentage of Employers Offering Health Coverage in Iowa

Additional data reflecting the current Iowa marketplace will be released soon in our 2013 Iowa Employer Benefits Study©, so stay tuned!

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