Why The Delay on Obamacare's Employer Mandate is Good

When it was passed in 2010, the Affordable Care Act required employers with more than 50 full-time workers to offer them affordable health insurance starting in 2014 or face fines. And as of Tuesday afternoon, that measure of the act has been delayed until 2015.

Obamacare opponents have seized the opportunity to use the delay as evidence that the legislation is fundamentally flawed. "Pushing the implementation of the employer mandate until after the 2014 election confirms the law was a historic mistake," said Sen. Lamar Alexander (R-TN).

What's the Treasury Department's justification for the delay? Assistant Secretary for Tax Policy Mark Mazur explained on the U.S. Department of Treasury blog:

"First, it will allow us to consider ways to simplify the new reporting requirements consistent with the law. Second, it will provide time to adapt health coverage and reporting systems while employers are moving toward making health coverage affordable and accessible for their employees."

It doesn't sound great, but here's why the delay is actually a good thing: As the Washington Post points out, a mandate that imposes a tax on employers for hiring people from low- and moderate-income families (the families who would qualify for subsidies under Obamacare) would discourage firms from hiring such individuals, and instead motivate them to hire people from families at higher income levels. It would also encourage them to change full-time workers to part-time workers. Really, really not great.

Here's my (perhaps overly optimistic) hope for the legislation: Dems retake the majority of the House in 2014, enabling the standstill on Obamacare to come to an end. (Right now, Republicans won't pass any measures that improve the law, and Democrats won't allow repeal = dead halt.) Then, the employer mandate can be better developed before it goes into practice in 2015. And then pigs will fly.