Here Comes the Hardest Part About Obamacare

Implementing the “employer mandate” is a major management challenge for Obama and his team.

WASHINGTON, DC - MAY 14: Director of the White House Office of Management and Budget Sylvia Mathews Burwell takes her seat as she arrives at her confirmation hearing before the Senate Finance Committee May 14, 2014 on Capitol Hill in Washington, DC. If confirmed, Burwell will succeed Kathleen Sebelius to become the next secretary of Health and Human Services. (Photo by Alex Wong/Getty Images)
National Journal
Ron Fournier
June 24, 2014, 6:56 a.m.

So you thought Obama­care was im­ple­men­ted, the con­tro­versy over? Wrong. Buckle up, here comes the “em­ploy­er man­date.”

For people like me who want the Af­ford­able Care Act to work but who worry about the Obama ad­min­is­tra­tion’s man­age­ment re­cord, this story in The Wash­ing­ton Post is fore­bod­ing: “Busi­nesses Gear Up for Em­ploy­er Man­date.”

Au­thor Sand­hya Somashekhar opens with a vign­ette about Kev­in Settles, a for­ward-look­ing res­taur­at­eur who offered health in­sur­ance to dozens of em­ploy­ees in Septem­ber to com­ply with the ACA in ad­vance of the man­date. The em­ploy­er man­date re­quires com­pan­ies with 50 or more full-time work­ers to of­fer health in­sur­ance or pay a fine.  

But un­like Settles’s oth­er ex­per­i­ments, this one hasn’t been great for his busi­ness. He put raises and ex­pan­sion plans on hold as he figured out the cost and lo­gist­ics of mak­ing the changes. To his sur­prise, his em­ploy­ees have not leaped at the chance to get health in­sur­ance. And he is still try­ing to fig­ure some things out — for ex­ample, how to safe­guard em­ploy­ee in­form­a­tion that must now be re­por­ted to the In­tern­al Rev­en­ue Ser­vice, such as the So­cial Se­cur­ity num­bers of chil­dren who are covered un­der their par­ents’ health plans.

This is a quint­es­sen­tial an­ec­dot­al “lede”; it puts a hu­man face on what Somashekhar and oth­er in­de­pend­ent health care journ­al­ists con­sider a loom­ing trend — second-guess­ing about the em­ploy­er man­date.

A num­ber of busi­nesses, in­clud­ing Regal En­ter­tain­ment and Sea­World, have re­duced hours for part-time work­ers to few­er than 30 a week — the law’s defin­i­tion of full time — to avoid hav­ing to of­fer them health in­sur­ance. Oth­er com­pan­ies say they are hold­ing back on hir­ing to avoid the in­sur­ance re­quire­ment. Sea­son­al em­ploy­ees and low-wage work­ers, such as ad­junct pro­fess­ors and cafet­er­ia staffers, have been hit es­pe­cially hard “¦

Many of the em­ploy­ers that have cut part-time hours or taken oth­er ac­tions to lim­it their costs un­der the law, such as fast-food res­taur­ants and school dis­tricts, have large num­bers of sea­son­al or hourly-wage work­ers. Tra­di­tion­ally, most of these work­ers have not re­ceived health be­ne­fits. And they are of­ten dif­fi­cult to cat­egor­ize as part time or full time, be­cause their hours vary.  

The White House and its apo­lo­gists in the left-wing me­dia have propag­ated two myths. First, that the law is a suc­cess — full stop — merely be­cause mil­lions of people signed up for health in­sur­ance rather than pay a pen­alty tax. Second, only anti-Obama’s par­tis­ans har­bor con­cerns as the ACA moves to­ward full im­ple­ment­a­tion.

Some sup­port­ers of the Af­ford­able Care Act say that the em­ploy­er man­date, which ap­plies to busi­nesses with at least 50 full-time work­ers, has fueled the law’s un­pop­ular­ity and that get­ting rid of it wouldn’t hurt the cent­ral goal of re­du­cing the num­ber of un­in­sured people.

“We’ve nev­er thought [the em­ploy­er man­date] was par­tic­u­larly good policy, and while people have prob­ably screamed too loudly about the ef­fects on em­ploy­ment, there is some of it that’s cer­tainly true, and it’s not worth the price we seem to be pay­ing,” said John Ho­la­han, a fel­low at the Urb­an In­sti­tute and a coau­thor of the re­cent pa­per “Why Not Just Elim­in­ate the Em­ploy­er Man­date?” “¦

Last week, Unite Here, a uni­on rep­res­ent­ing cafet­er­ia work­ers, ral­lied at the Cap­it­ol to cri­ti­cize what it called a loop­hole in the law. It says the loop­hole al­lowed So­dexo, a French food-ser­vice com­pany, to drop health be­ne­fits for more than 3,000 work­ers across the United States.

What can Obama and his team do about all this? They’ve already delayed the man­date twice. A third time would fur­ther di­min­ish the cred­ib­il­ity of the law and of the ad­min­is­tra­tion.

Can­celing the man­date is not a likely course. First, it would re­quire ac­tion by a grid­locked Con­gress, which is di­vided on the 2010 law. Second, it would cre­ate a $150 bil­lion hole in the budget that pays for sub­sidies to low- and middle-in­come in­di­vidu­als buy­ing health in­sur­ance. That money comes from fines paid by com­pan­ies that don’t com­ply with the law, a re­dis­tri­bu­tion of wealth that the White House doesn’t like to ac­know­ledge.

That brings me to the first thing Obama and his team need to do: Be hon­est. Dis­cuss dir­ectly and truth­fully the trade-offs re­quired to ex­pand health in­sur­ance. Em­path­ize with its crit­ics, rather than de­mon­ize them. Stop spin­ning and start lead­ing.

Second, the com­plic­ated law is go­ing to need su­perb man­age­ment from the White House, the Health and Hu­man Ser­vices De­part­ment, and oth­er agen­cies. “Su­perb” is not a word oft as­so­ci­ated with Obama or his team. The IRS, for ex­ample, still has not pro­duced the in­form­a­tion and forms re­quired for busi­ness to build ACA re­port­ing sys­tems.

One good sign is the nom­in­a­tion and con­firm­a­tion of Sylvia Math­ews Bur­well, the former deputy White House chief of staff (un­der Pres­id­ent Clin­ton) and budget dir­ect­or (un­der Obama) who is, by all ac­counts, a tal­en­ted lead­er and man­ager. As sec­ret­ary of Health and Hu­man Ser­vices, she suc­ceeded Kath­leen Se­beli­us, who over­saw the com­ic­ally poor ACA launch.  

Math­ews breezed to con­firm­a­tion after as­sur­ing Re­pub­lic­ans that trans­par­ency and ac­cur­acy would be her hall­marks in deal­ing with busi­nesses on the em­ploy­er man­date. “What we’re try­ing to do is com­mon­sense im­ple­ment­a­tion with­in the law,” Bur­well said, be­fore buck­ling up.

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