Tuesday, July 9, 2013

For All Practical Purposes, The Individual Mandate Has Also Been Delayed

If you can't qualify for any of the 20-flavors of exemption, don't worry, the individual mandate can't be enforced anyway.  

This is from Robert Book at Forbes:
...As described on the Treasury Department’s blog, under the Orwellian title “Continuing to Implement the ACA in a Careful, Thoughtful Manner,” what the Administration is postponing is not the employer mandate as such, but rather postponing the data submission requirements (Sections 6055 and 6056) needed to implement it. The ACA requires insurers, employers, and anyone else providing health coverage to report, in a tax-return-like fashion, personal information (such as social security numbers) of anyone for whom they provide health coverage, and in the case of employers, anyone eligible for coverage who declines it, as well as the price at which it is offered and the amount of pay given to that person.
According to the administration’s blog post, setting up the system to collect that information is taking too long, and without that information they can’t enforce the employer mandate.
What the announcement didn’t say is that without that information, they can’t enforce the individual mandate, either.
The individual mandate requires taxpayer to pay a penalty if they don’t obtain “qualified” coverage, but there are a number of exceptions. Primarily, taxpayers are exempt from the penalty if the lowest-cost coverage available to them requires them to pay more than 8% of their family income. Calculating eligibility for this exemption requires information from every employer of every family member, including the employee share of the premium for employer-sponsored coverage, whether the employee worked more or less than 30 hours per week, the amount paid by that employer, and whether the coverage is for the employee only, or the employee plus his or her family. That is precisely the information whose collection is delayed under the administration’s new rule.
Furthermore, little-noticed in the announcement is that the delay in the reporting requirement applies also to insurers – including those offering coverage in the exchange. During the delay, insurers will not have to report the names and social security numbers of people they cover – in other words, the list of people who don’t have to pay the penalty because they obtained exchange coverage.
Since neither employers nor insurers will have to report who is covered under their health plans, how is the IRS supposed to determine who has to pay the penalty for failing to obtain qualified coverage? They won’t – by the same line of reasoning that the administration applies to the employer mandate.
As the administration puts it, “We recognize that this transition relief will make it impractical to determine which employers owe shared responsibility payments (under section 4980H) for 2014. Accordingly, we are extending this transition relief to the employer shared responsibility payments. These payments will not apply for 2014.”...
It is striking that in just a few short years, the administration has overturned, waived, or delayed – either with or without statutory authority – almost every major component of their signature health reform bill. Since October 2011, the administration has indefinitely suspended the CLASS Act (voluntary federal long-term care insurance, later repealed by Congress), declared an early end to the federal high-risk pools, and now delayed for at least a year the Small Business Health Options Program (SHOP exchanges, to make it easier for small employers to provide coverage), the Federal Basic Health Plan Option (FBHPO, low-cost coverage for those just over the income limit for Medicaid), the employer mandate, and now, perhaps, the individual mandate as well....