Saturday, July 20, 2013

The House tries yet again to delay or gut Obama-Care mandates; And who is behind all these attempts

by LAS

The GOP-dominated House has yet again passed a bill to delay or gut key provisions of the PPACA (aka Obama-Care) law. This week they passed bills to delay implementation of two key provisions, the individual mandate and the employer mandate (for businesses with 50 or more workers).

First of all, even though the House has made several attempts to delay or gut provisions of the reform law, it is very unlikely that the Senate will even discuss comparable bills on the floor. In fact, the House has voted 37 times already to “repeal or defund at least part of the health-care law, including three times to annul the entire measure” since 2010.

The Obama administration said in a statement that the measure to delay the employer mandate is “unnecessary,” and legislation postponing the individual requirement “would raise health insurance premiums and increase the number of uninsured Americans.”

However, House members of the GOP ran on promises to delay or defund PPACA in 2010 or 2012, and so they wish to make a little political hay during the summer months by keeping the issue on the House floor.

But my question is more about who is behind all these attempts to gut the bill. The key is the the employer mandate applies to companies with 50 or more employees. Specifically, companies that may have thousands of employees.

What many Americans may not know is that the PPACA law includes something called the non-discrimination clause. This has nothing to do with the color of a policy-holder's skin or what religion he or she believes in.

As it is now, companies can design deluxe healthcare plans for executive employees,as long as the plan was fully insured. But the non-discrimination clause in Obama-Care applies to ALL group healthcare plans, in terms of eligibility or benefits. The fact is that current healthcare plans treat different groups of employees differently. Most people are aware that the top brass gets the best perks package in the company. But most people may not be aware that even their healthcare plans are different, and that the PPACA specifically bars this and penalizes this practice.

First let us define the term “highly compensated” employees. This group includes the five highest-paid officers of the company, the shareholders who own 10 percent or more of the company, and all employees among the top 25 percent of all the company's employees.

Violators of the non-discrimination rules will be subject to stiff fines. This starts at $100 per day, per “failure penalty” – which will likely apply to each NON-highly-compensated employee who is left out of the cushy coverage plans. The company is also vulnerable to a civil lawsuit to compel it to provide the same upscale coverage plan to the non-covered employees.

Multiply that $100 per day per non-covered employee for a large multinational corporation, and you are talking about a significant hit to the corporate pocketbook. For a company with say, 500 employees, this easily adds up to a fine of $37,500 PER DAY. This is where I believe the pressure is coming from on House members to keep trying to negate provisions of the PPACA law.

Corporate America really believes that the executive class has to be lured to work for a given company with the most extraordinary gold-plated perks of every kind. Not being able to offer a healthcare plan that has no deductibles and no copays seems like a small loss when they are offering a company car, country club and health club and golf club memberships, the proverbial key to the executive washroom, stock options, and much more.


The employer mandate is being delayed for one year with White House permission. And the government has stated that there will be a phasing-in period where employers will be given time to make adjustments before the government begins sanctioning those that do not comply. But still I would not be surprised if corporate America tries to get all current healthcare plans to be grandfathered under the law, thereby escaping all sanctions and fines entirely. 

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