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Delay in employer mandate means 1 million fewer covered in 2014: CBO

Delay in employer mandate means 1 million fewer covered in 2014: CBO

Delaying a key health care reform law provision until 2015 requiring many employers to offer health insurance or pay a fine will result in about 1 million fewer people with employment-based coverage next year and cost the government billions of dollars in lost revenue, according to a Congressional Budget Office report released Tuesday.

The CBO report, requested by Rep. Paul Ryan, R-Wis., chairman of the House Budget Committee, is the first to analyze the effect of the Treasury Department's surprise July 2 announcement to delay the so-called employer mandate.

Regulators said the delay is necessary to simplify how employers are to report to the government enrollment in their health care plans.

As a result of the one-year delay in the mandate, about 156 million people next year will have employment-based coverage, or 1 million less than the CBO projected in May prior to the Treasury Department's decision.

The CBO said it expects “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.” Still, the CBO said it expects that “few employers will change their decisions about offering such coverage.”

Of those 1 million individuals, about half will be uninsured next year, with the other half obtaining coverage through public health insurance exchanges, Medicaid or the Children's Health Insurance Program, the CBO said.

In addition, the CBO projects the government will see a $10 billion loss in revenue from penalties that would have been paid by employers not offering qualified coverage. Under the Patient Protection and Affordable Care Act, employers with at least 50 employees are liable for a $2,000 penalty for each full-time employee, minus the first 30 employees.