Obamacare supporters have long argued that the law will not have a negative impact on jobs. President Barack Obama’s latest delay of the employer mandate contains a clear admission that it will.
As recently as last week, advocates for the Affordable Care Act fiercely responded to a Congressional Budget Office report, which concluded that the law will push the equivalent of 2.5 million full-time workers out of the labor market by 2024. Liberal talking heads, journalists and White House officials argued that what the CBO report actually said was that Obamacare would help people pursue their dreams, unencumbered by the jobs that had been so brutally holding them in place. Republicans, of course, countered that the CBO report was tangible proof that the law is a job killer.
This week, the Obama administration finalized a regulation that delays enforcement of the employer mandate until 2015 for companies with 50 to 99 workers. Contained in the regulation was the clearest admission to date that Obamacare, and its employer mandate in particular, will indeed have a negative effect on jobs: To qualify for the delay, employers must certify that they haven’t reduced the number of workers in their company, or the total hours of service of its employees.
Put another way, if employers are going to take advantage of the one-year delay in enforcement of the employer mandate, they have to attest (under penalty of perjury) that they aren’t cutting jobs or reducing hours because of Obamacare. By pointing this out as a possibility — or an outcome to be avoided — the administration is acknowledging what it long denied: The law creates incentives for employers to cut hours and jobs.
The regulation delaying the employer mandate tries to give employers some flexibility, allowing them to reduce the number of employees for “bona fide business reasons” such as the “sale of a division, changes in the economic marketplace in which the employer operates, or terminations of employment for poor performance.” This raises the question of how the administration intends to enforce the very exception it has created.