July 3, 2013
Though brokers and agents had mixed reactions to PPACA’s employer mandate delay, one reaction was more collective: shock.
Industry insiders were throwing out words like “speechless” and “shocked” in response to the unexpected delay announced late Tuesday by the Treasury Department.
“It’s an exciting time, and last night’s bomb certainly made us be on our toes,” said president of health and welfare benefits at North Carolina-based Ebenconcepts.
But it didn’t stop brokers from mobilizing efforts in informing their clients of the changes.
“Frankly, I’m more excited by the fact that we communicated to our entire book of business and prospects before 8 am ET, and that most agents will view this delay as a chance to catch-up,” Smith said.
Digital Insurance President and CEO Adam Bruckman agreed.
“We’ve been working diligently for several years in preparation for [PPACA’s] numerous provisions, and we will continue along these same lines,” he said. “More time is always welcome news and provides some relief for those affected by it most.”
Many — like Janet Trautwein, CEO of the National Association of Health Underwriters — were grateful for the reprieve.
“We appreciate the Obama administration has listened to the concerns of American businesses and delayed the penalties for a requirement that was not ready to be to effectively implemented,” she said in a statement Wednesday. “NAHU has had longstanding concerns that employers attempting to comply with very complex requirements that differ significantly from time-tested benefit practices on very short notice could be penalized for inadvertent violations.”
For others, the decision simply raised more questions.
“The delay is significant and begs the question: What might be next in terms of delayed implementation?” consultant Brandon Scarborough wondered.
“If taken at face value, it’s surprising this is where the administration sees the greatest need for ‘simplification.’ The construction and integration of the federal data hub and exchange marketplaces seem far more precarious at this point. The pay-or-play rules, controversial or not, have been pretty clearly defined.”
Scarborough also said he wonders how the move might affect individual subsidies.
“And if it doesn’t, how does it affect our ability as a nation to pay for them?," Scarborough, a former Benefits Selling Broker of the Year, said. “According to the CBO, employers were expected to pay more than $130 billion in penalties over the first 10 years. Any delay will most certainly prove costly.”
But the political ramifications, at least, the morning after, seem to far outweigh the practical ones.
“Reactions will pour in over the next few days and weeks speculating on the political motivations behind this, or what this means for the overall strength and viability of the law,” Scarborough said. “The most likely answer is it’s simply due to a growing concern within the administration for unintended consequences. The ‘pay or play’ regulations are pretty clearly defined and understood. The fear likely stems from an inability to predict its impact on labor (employment/unemployment), and in a fragile economy and election year, the stakes are extremely high.”
But another consideration is how many people this move will actually affect. As Trautwein pointed out, 98 percent of large businesses already offer health coverage.
“The practical result of all this is a good one, national budget notwithstanding,” Scarborough echoed.
“While the majority of large businesses were not going to be affected by this portion of the law – other than compliance administration — for the companies and industries that were, this is significant and welcome relief.”
http://www.benefitspro.com/2013/07/03/mandate-delay-shocks-brokers?eNL=51d47cea150ba02831000019&utm_source=BenefitsProDaily&utm_medium=eNL&utm_campaign=BenefitsPro_eNLs&_LID=144817897
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