The Obama administration's decision to delay the Patient Protection and Affordable Care Act's employer insurance mandate by one year will cost the government $12 billion, according to a report from the Congressional Budget Office.
Employer penalty payments that would have been collected in 2015 for penalties assessed in 2014 account for $10 billion of the cost increase, according to the CBO. Cost for exchange subsidies are projected to go up by $3 billion. However, there will also be an increase in taxable compensation because of fewer people enrolling in employment-based coverage, offsetting those cost increases by approximately $1 billion.
Under the PPACA, businesses and companies with 50 or more employees are mandated to offer health insurance to those employees or pay a penalty. The rule was originally slated to begin January 2014, but the Obama administration delayed it by one year to allow more time for the government to simplify the new reporting requirements and to adapt health coverage and reporting systems.
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