The Obama administration’s decision to delay the Affordable Care Act’s employer mandate will cost the federal government billions of dollars in employer penalties in 2014, according to the Congressional Budget Office (CBO), USA Today reports.
Under the provision, employers with at least full-time 50 workers must provide affordable health coverage or face a $2,000 fine per worker after the first 30 employees. However, last week the White House announced that the employer coverage mandate will be delayed until 2015 to provide businesses with more time to comply with its reporting requirements.
The CBO estimates that the decision means the federal government will not collect about $4 billion in employer penalties in 2014 and the figure will increase to about $10 billion in 2015.
Further, many health policy experts have noted that the decision could raise federal costs by increasing the number of low- and moderate-income individuals who will seek federal subsidies to purchase coverage through the law’s health insurance exchanges, as opposed to getting coverage through their employer.
The Washington Post reports that the employer mandate delay could indicate the ACA is at risk of further delays. Speaking on the condition of anonymity, some federal officials said the administration could authorize delays or tweaks to other ACA provisions. The law’s health insurance exchanges, which are scheduled to open October 1, are the most vulnerable to such changes.
