Wednesday, July 17, 2013

Delays on ACA's Mandates

In response to the White House announcement that it will delay enforcement of the so-called employer mandate in the Affordable Care Act, House Republicans introduced two bills, H.R. 2667 and H.R. 2668, that would amend the ACA to delay the effective date of the employer mandate and the individual mandate, respectively.

The White House promised a veto, saying that legislation authorizing a delay for the employer mandate is unnecessary (because according to the White House it can do this unilaterally) and that legislation authorizing a delay for the individual mandate would raise health insurance premiums and result in fewer insured.  

The bills were clearly designed to highlight the Republicans' complaint that the administration is treating businesses more favorably than individuals and to force the administration to own up to its more favorable treatment of businesses.  The White House didn't bite.  (The Hill covered the politics here.)

But there's still this problem: It's not at all clear on what authority the administration can delay the enforcement of the employer mandate.  As we wrote earlier, the ACA says that the employer mandate "shall apply to months beginning after December 31, 2013."  That doesn't leave much wiggle room.

If the administration doesn't enforce the employer mandate until later, it's not clear that anyone could complaint (that is, that anyone would have standing to sue in federal court to compel enforcement).  So the administration, as a practical matter, may not need a legal theory for delayed enforcement.  

SDS

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Comments

The legal theory I have seen advanced by Treasury officials is that they're relying on 26 U.S.C. 7805(a) which allows the Treasury Secretary to "prescribe all needful rules and regulations for the enforcement of this title, including all rules and regulations as may be necessary by reason of any alteration of law in relation to internal revenue." They combine that with the "we do this all the time for other tax laws" argument, which is true. As just one example, there's an ongoing moratorium on enforcement (in effect since 2010!) of the discrimination rules for insured health plans that also appeared in the ACA, but no one is complaining about that because it doesn't make for good political theater. :-)

Regardless, however, in my opinion, 7805(a) is not a great basis for authorizing a delay since it requires the rules to be "needful...for enforcement." It seems a non-enforcement rule is antithetical to the spirit of that provision, notwithstanding the long history of relying on it for enforcement delays.

As you correctly note, though, no one is likely to complain and, even if they do, they're not likely to have standing to sue.

Posted by: Chris Rylands | Jul 23, 2013 5:52:31 AM

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