Three days after the Obama Administration announced that it would be delaying the “employer mandate” of its signature healthcare reform law, it released 606 more pages of guidance on the legislation. The big news to come out of that guidance? Two more of the law’s requirements will be delayed until at least 2015.
Since the administration delayed the reporting requirements needed to enforce the employer mandate, it also decided to eliminate two other reporting requirements surrounding the health exchange tax credits and subsidies.
While the delay in enforcement of the employer mandate was generally celebrated by employers, the announcement of the new requirement delays was met with much more cynicism.
Here’s what was delayed:
1. The need to verify employees’ coverage assertions
In the administration’s original announcement that it would delay enforcement of the employer mandate until 2015, it reassured individuals — who are still required to comply with the “individual mandate” to obtain health insurance or pay a penalty in 2014 — that tax credits designed to help the uninsured afford coverage will still be available next year.
The feds restated that claim again in their latest round of regs. But in addition, they said that the healthcare exchanges won’t have to verify applicants’ claims that they’re not offered “affordable” coverage by their employer (a requirement to qualify for a credit) until at least 2015.
This rule also reinforces the fact that employers won’t have to deal with the burden of reporting whether or not they offer adequate health coverage under Obamacare.
2. Strict oversight of income claims
Under the law, an individual’s income determines what — if any — insurance-related tax subsidies the person is eligible for.
Uninsured and underinsured individuals with incomes that amount to 400% or less of the federal poverty level will be eligible for some amount of subsidy. The less they earn, the greater their subsidy.
But the new regs say the feds will scale back oversight of what applicants say they earn, at least for 2014.
Originally, the Center sfor Medicare & Medicaid Services proposed auditing anyone who reported income that came in 10% lower than what federal data said they earned the previous year.
But the feds have now decided to go a different route, saying they’ll only audit a “statistically significant number” of people with large income discrepancies.
Will under-regulation lead to overpayments?
The new delays have their critics — and a lot of them — who claim the rules will allow many people who shouldn’t qualify for tax credits or subsidies to get them anyway.
In fact, The Wall Street Journal reports that the Treasury inspector general revealed that as much as 25% of Earned Income Tax Credits are given to people who shouldn’t be eligible for them, and if the same error rate occurred with Obamacare’s subsidies, it could result in $250 billion in overpayments within the first decade.
A previous version of this story was originally published on our sister site, HRBenefitsAlert.com.
