Hearing Description:
The Oversight and Investigations committee met to examine the announcement by the Department of Treasury that it would be delaying the employer mandate by one year. Representatives were very curious as to whether the individual mandate has been discussed at the IRS for delay as well, but the witness did not seem to think so.
Hearing Date: July 18, 2013
Hearing Summary: Prepared for AAPS by the Market Institute
The Oversight and Investigations subcommittee recently met to examine the recent announcement by the White House that the employer mandate stemming from the Affordable Care Act would be delayed a year. According to the background notice, the Treasury Department provided the transition relief based on concerns over the implementation of the law. Chairman Fred Upton (R-MI) said in his opening statement he hopes that Congress will be able to delay the implementation of the individual mandate for an additional year and he’s looking forward to hearing from the witness as to when and why the employer mandate was delayed. The fact that the administration waited two weeks to announce the delay is troubling, and the American people deserve to know why. Subcommittee Chairman Tim Murphy (R-PA) echoed the same sentiments. He wants answers as to why the government was not ready to implement the employer mandate and why individuals are still subject to an individual mandate.
Rep. Henry Waxman (D-CA) said in his opening statement that a recently released HHS report stated the ACA would result in insurance premiums decreasing 18% and small business savings could be as much as 20%. He is disappointed with the hearing, saying it’s intention is to sabotage the law and not improve it.
The witness, Mark Iwry, Senior Advisor to the Secretary at the Department of Treasury, testified in his opening statement that the Treasury Department would be providing transition relief for the employer mandate based on concerns from businesses with complying with the law. Reporting requirements will be delayed until 2015 following full system tests in 2014. Due to the transition relief, the IRS will not require employers to pay assessable payments for insurance because they will not yet be aware which of their employees qualified for a premium tax credit. It should be noted however, that any other provisions in the ACA, including the premium tax credit, will not be affected by the delay of the employer mandate. The expectation is the relief will result in a smoother and more effective transition.
In response to questioning, Mark Iwry said:
- Treasury has considered the burdens and costs associated with the individual mandate
- Treasury executed the transition relief using administrative authority
- There are no other provisions that have been identified in the ACA that will be subject to transition relief at the moment
- Treasury has not yet considered if it has the authority to delay the individual mandate
- The decision to delay the employer mandate was done in consultation and coordination with the White House
- Transition relief has been used by other administrations pertaining to tax policy and statutes
- There is every intention to have the implementation of the employer provisions at the beginning of 2015
The IRS heard from many associations representing many different companies voicing their concerns about the employer requirements
Hearing Website
http://energycommerce.house.gov//hearing/patient-protection-and-affordable-care-act-implementation-wake-administrative-delay
Testimony:
J. Mark Iwry
Senior Advisor to the Secretary
Deputy Assistant Secretary for Retirement and Health Policy
U.S. Department of Treasury
