What the Employer Mandate Delay Really Costs

Employers may have rejoiced when the Obama administration announced that it was delaying the employer mandate provision of the Affordable Care Act for another year, but the Congressional Budget Office just released how much this setback will cost the government.

According to the analysis by the CBO and the staff of the Joint Committee on Taxation (JCT), delaying the employer mandate until 2015 means that the net cost of the ACA to the federal government is now $10 billion more. Overall, with other delays and changes recently announced, the ACA will cost $12 billion more.

The delay of the employer mandate means that it will not be collecting penalties from large employers that do not offer health insurance coverage meeting the affordability standards defined by the ACA.

“The budgetary effects other than the loss of revenues from penalty payments stem primarily from changes in how many people will obtain insurance coverage and from what source. CBO and JCT expect that some large employers that would have offered health insurance coverage to their employees in 2014 will no longer do so as a result of the one-year delay of penalties for those that do not offer affordable coverage.”

The CBO and JCT expect that roughly 1 million fewer people will enroll in employment-based coverage next year as a result of changes and new rules. According to the analysis, half of those people will simply remain uninsured, while the other half will either go through the exchanges or enroll in Medicaid or the Children’s Health Insurance Program.