How were the ACA penalties postponed?

[SteveH]

I have a real question. I don't want to try and debate the merits of the ACA. What I don't understand is how the mandate that companies with more than 50 full-timers offer affordable health insurance or face a $2,000-per-worker penalty was recently delayed until 2015 by the Obama Administration.

From what I understand this announcement was made on July 2 via blog post on the Treasury Department’s website, Assistant Treasury Secretary Mark Mazur said that the ACA’s new reporting requirements on employers and insurers will not be enforced in 2014, as previously scheduled.

-- Side Note --

Wasn't there a lot of political spinning that the ACA was not a new tax? Yet here is Mark Mazur's biography from the Treasury Department's website.

Mark J. Mazur currently serves as the Assistant Secretary for Tax Policy. In this role, he is responsible for developing, analyzing, and coordinating Treasury's and the Administration's agenda, policies, and guidance on tax issues. Since 2009, Mazur has served as Deputy Assistant Secretary for Tax Analysis, where he advised the Secretary on the economic analysis work undertaken by Treasury's Office of Tax Policy, including studies and reports. Prior to joining the Office of Tax Policy, Mazur spent eight years working for the Internal Revenue Service, where he was the Director of Research, Analysis, and Statistics. Mazur has spent 23 years working for the federal government, including positions at the Congressional Joint Committee on Taxation, the President's Council of Economic Advisors and the National Economic Council under President Clinton, and the Department of Energy.​

Sounds like a tax man to me...

-- End Side Note --

Unless things have changed since my last civics class, the legislative branch passed laws and the executive branch can not just announce a change to a law. Certainly the Treasury Department is unable to change a law. Certainly we have a more complex manner of amending laws than just making a blog post!

Has the Treasury Department effectively changed the law by choosing not to enforce it? That seems to defeat the purpose of the legislative branch (the representatives of the people) creating laws in the first place.

Personally I don't like the law, but I dislike the laws of our country being adjusted at the whims of people in positions of power whether that is the president or representatives at the IRS.

I suspect Obama haters will weigh in with witty comments, but I really would like to understand how a change to the ACA was even possible without going back to Congress to amend the law.

 

[g5000]

-- Side Note --

Wasn't there a lot of political spinning that the ACA was not a new tax? Yet here is Mark Mazur's biography from the Treasury Department's website.

Mark J. Mazur currently serves as the Assistant Secretary for Tax Policy. In this role, he is responsible for developing, analyzing, and coordinating Treasury's and the Administration's agenda, policies, and guidance on tax issues. Since 2009, Mazur has served as Deputy Assistant Secretary for Tax Analysis, where he advised the Secretary on the economic analysis work undertaken by Treasury's Office of Tax Policy, including studies and reports. Prior to joining the Office of Tax Policy, Mazur spent eight years working for the Internal Revenue Service, where he was the Director of Research, Analysis, and Statistics. Mazur has spent 23 years working for the federal government, including positions at the Congressional Joint Committee on Taxation, the President's Council of Economic Advisors and the National Economic Council under President Clinton, and the Department of Energy.​

Sounds like a tax man to me...

-- End Side Note --

The individual mandate is a tax. The Supreme Court ruled it as such, which makes it constitutional in their eyes.

Unless things have changed since my last civics class, the legislative branch passed laws and the executive branch can not just announce a change to a law. Certainly the Treasury Department is unable to change a law. Certainly we have a more complex manner of amending laws than just making a blog post!

Has the Treasury Department effectively changed the law by choosing not to enforce it? That seems to defeat the purpose of the legislative branch (the representatives of the people) creating laws in the first place.

Personally I don't like the law, but I dislike the laws of our country being adjusted at the whims of people in positions of power whether that is the president or representatives at the IRS.

I suspect Obama haters will weigh in with witty comments, but I really would like to understand how a change to the ACA was even possible without going back to Congress to amend the law.

Congress writes the law, the Executive enforces the law. And the Executive has prosecutorial discretion. What's more, oftentimes execution of the law means writing the actual regulations which will be enforced. The law may create a framework, but the regulations form the body of the enforcement.

This is hardly the first time in our history the Executive branch has delayed enforcing a law or finalizing regulations, and it certainly won't be the last.

 

[SteveH]

g5000, thanks for the reply.

Being a middle class law abiding citizen employed by a small business I guess I don't worry about new laws too often because they rarely affect me. This law has me freaked out though. I know it is going to affect me and I worry in a very bad way.

I'm a healthy 38 year old that exercises 4-5 days per week, pays extra money to eat whole foods, make certain I get adequate sleep, and almost never have a need to go to the doctor outside my once per year wellness check. Since I do all the cooking my family is very healthy too. Honestly I can't afford higher premiums on my health insurance policy because I spend so much keeping us active and healthy.

At this point I just want clarity. I want this law to either kick in or die out so I can figure out if I need to change my spending habits and/or start saving money to afford the new law. I can't imagine my $205 per month policy is going to be around once the ACA is in full force.

It seems wild to me that laws are allowed to be essentially ignored if the executive branch decides not to enforce it. I guess thanks for opening my eyes to that reality, but it doesn't seem right.

 

[g5000]

g5000, thanks for the reply.

Being a middle class law abiding citizen employed by a small business I guess I don't worry about new laws too often because they rarely affect me. This law has me freaked out though. I know it is going to affect me and I worry in a very bad way.

I'm a healthy 38 year old that exercises 4-5 days per week, pays extra money to eat whole foods, make certain I get adequate sleep, and almost never have a need to go to the doctor outside my once per year wellness check. Since I do all the cooking my family is very healthy too. Honestly I can't afford higher premiums on my health insurance policy because I spend so much keeping us active and healthy.

At this point I just want clarity. I want this law to either kick in or die out so I can figure out if I need to change my spending habits and/or start saving money to afford the new law. I can't imagine my $205 per month policy is going to be around once the ACA is in full force.

It seems wild to me that laws are allowed to be essentially ignored if the executive branch decides not to enforce it. I guess thanks for opening my eyes to that reality, but it doesn't seem right.

If ObamaCare is not repealed, your healthcare costs are going to go up.

If ObamaCare is repealed, your healthcare costs are going to go up.

Hope that helps.

 

[Two Thumbs]

It was postponed by the magic of a coming election.

How doesn't matter comrade. And please report to your local re-education camp immediately.

 

[hjmick]

Illegally.

 

[Two Thumbs]

Actually, they took time to read the whole fucking thing and were all like;

holyfukkinshitdood, this is like math and stuff, and the stuff is harder than the math.

And as we all know, math is very very, seriously very hard for liberals.

 

[g5000]

Illegally.

It is not illegal. It may be unethical, but not illegal. And as I said earlier, it is not the first time in our history a President has delayed enforcement of a law. I'm sure if you knew how to use Google, you would find this out for yourself.

 

[g5000]

It was postponed by the magic of a coming election.

This is probably pretty close to the truth. The fiscal impact of ObamaCare on small businesses is going to be heavy. Can't have that before the mid-terms.

Once Obama is out of office, he will be laughing his ass off on the golf course when the bill starts bankrupting all 50 states and the federal government.

 

[Two Thumbs]

It was postponed by the magic of a coming election.

This is probably pretty close to the truth. The fiscal impact of ObamaCare on small businesses is going to be heavy. Can't have that before the mid-terms.

Once Obama is out of office, he will be laughing his ass off on the golf course when the bill starts bankrupting all 50 states and the federal government.

clearly

The hours I'm working at my job now are just nuts. 48 was the lowest in the last 2 months, and I've hit 56 3 times. We are weeks ahead, then the news came out about the delay, and I worked just 40 hours and it looks like another 40 for this week.

It's going to be brutal and ugly.

Sad thing is, I don't see it ever getting better, I just see people having to deal with it getting worse and worse.

 

[hjmick]

Illegally.

It is not illegal. It may be unethical, but not illegal. And as I said earlier, it is not the first time in our history a President has delayed enforcement of a law. I'm sure if you knew how to use Google, you would find this out for yourself.

Actually, there are several articles that question the legality of the postponement. Most of those use the lack of any wording to allow the Treasury to waive the requirements being postponed as their jumping off point. Here's a pretty good one written by a law professor at the University of Michigan:

Does the administration have the legal authority to delay the employer mandate? And what if it doesn?t? | The Incidental Economist

I especially liked the final two paragraphs:

...For now, though, let’s assume for the sake of argument that the waiver is unlawful. So what? Could someone challenge it in court, as Avik Roy suggests might happen? Almost certainly not. A would-be litigant must have standing to go to court, which means that the supposedly unlawful agency action must have injured, or be expected to injure, the litigant. Employers can’t meet that standard: waiving a tax penalty doesn’t harm them (and no, fancy theories that an employer is harmed because his competitor isn’t taxed enough won’t get off the ground). Nor would upset advocacy organizations or members of Congress have standing.

So who’s hurt? It’s possible, even likely, that some workers will lose out on employer-sponsored insurance as a result of the waiver. But any individual worker is going to be hard-pressed to convince a court that her employer would have given her health insurance in 2014 but for waiver of the tax penalty. Under current doctrine, that’s much too speculative a potential injury to support standing. Unless I’m missing something, no one has standing to challenge the waiver—whether it’s legal or not.

 

[eflatminor]

If ObamaCare is not repealed, your healthcare costs are going to go up.

If ObamaCare is repealed, your healthcare costs are going to go up.

True.

On the other hand, if the government (states and feds) got OUT of the healthcare and insurance business, allowing competition and personal choice to thrive, our healthcare costs would most certainly go down. Central price controls (and the dictating of coverage terms) always result in higher prices and shitty results, always.

 

[SteveH]

I wish the government could use the tax code more wisely instead of taxing us into buying insurance.

Taxes induce behavior. There are tax deductions for mortgages because home ownership is a desired action. There are tax deductions for donating to charities. There are business tax deductions to stimulate economic activity. There are even tax deductions for saving for retirement. All actions that the government has deemed important and the tax code is used to entice people to perform these actions. We aren't taxed if we don't buy a house, donate to charity, start a business, or save for retirement.

The ACA will force action. We will all buy insurance. On the surface it's a good idea. We want sick people to have insurance so they can go to the doctor. There's the rub though. We want SICK people to have insurance. No one cares if healthy people have insurance. Or maybe now we do so that the cost of insurance for sick people will go down. Yep, the healthy subsidizing the sick... (sounds like the rich subsidizing the poor)

Instead though couldn't we use the tax code to induce a better behavior? Can't we give subsidies to farmers that produce healthy meats, fruits, vegetables, and seeds in an effort to keep these products more affordable? Can't we set up a tax (like the gas tax) on products in the "middle of the grocery store" that are less than healthy to help pay for the problems with our health care system? We can even call it the fat tax. No, that's too insensitive. Let's call it a sugar tax. Can we give people tax credits for being healthy? I don't even really care how you manage it, but my suggestion would be body fat percentage with an age modifier instead of a stupid BMI that makes athletes seem as if they are obese.

I think Obama's attempt to "fix" things is just the wrong way of fixing it. I don't begrudge him too much for attempting to fix it. Looking at how unhealthy we are as a society and it obvious we need some fixing. In fact I can respect someone for trying. Just do it the right way.

Give people incentives to be healthy, not penalties for being so healthy you don't need to medical services.

 

[g5000]

If ObamaCare is not repealed, your healthcare costs are going to go up.

If ObamaCare is repealed, your healthcare costs are going to go up.

True.

On the other hand, if the government (states and feds) got OUT of the healthcare and insurance business, allowing competition and personal choice to thrive, our healthcare costs would most certainly go down. Central price controls (and the dictating of coverage terms) always result in higher prices and shitty results, always.

Amen, brother.

 

[g5000]

I wish the government could use the tax code more wisely instead of taxing us into buying insurance.

Taxes induce behavior. There are tax deductions for mortgages because home ownership is a desired action. There are tax deductions for donating to charities. There are business tax deductions to stimulate economic activity. There are even tax deductions for saving for retirement. All actions that the government has deemed important and the tax code is used to entice people to perform these actions. We aren't taxed if we don't buy a house, donate to charity, start a business, or save for retirement.

The ACA will force action. We will all buy insurance. On the surface it's a good idea. We want sick people to have insurance so they can go to the doctor. There's the rub though. We want SICK people to have insurance. No one cares if healthy people have insurance. Or maybe now we do so that the cost of insurance for sick people will go down. Yep, the healthy subsidizing the sick... (sounds like the rich subsidizing the poor)

Instead though couldn't we use the tax code to induce a better behavior? Can't we give subsidies to farmers that produce healthy meats, fruits, vegetables, and seeds in an effort to keep these products more affordable? Can't we set up a tax (like the gas tax) on products in the "middle of the grocery store" that are less than healthy to help pay for the problems with our health care system? We can even call it the fat tax. No, that's too insensitive. Let's call it a sugar tax. Can we give people tax credits for being healthy? I don't even really care how you manage it, but my suggestion would be body fat percentage with an age modifier instead of a stupid BMI that makes athletes seem as if they are obese.

I think Obama's attempt to "fix" things is just the wrong way of fixing it. I don't begrudge him too much for attempting to fix it. Looking at how unhealthy we are as a society and it obvious we need some fixing. In fact I can respect someone for trying. Just do it the right way.

Give people incentives to be healthy, not penalties for being so healthy you don't need to medical services.

There is no justification for ANY tax deduction. In fact, it is precisely because we have not only tolerated, but have demanded, tax deductions that we have the individual mandate today. With extra special soaring national debt sauce.

It is sheer insanity to ask the government to intervene unnecessarily in commerce; to give you a tax break for buying the right product or using the right energy source and so forth and so on, which is another way of saying you get penalized for not buying those products. You get taxed extra for not buying a house. That's extremely regressive! So now you balk at an extra tax for not buying insurance? Too late!!!

We need to eliminate all tax expenditures. Every one of them.

Countries that eliminated the mortage interest deduction saw no decline in home ownership.

It makes absolutely no sense that two people earning the exact same income would be paying wildly different amounts of taxes.

 

[deltex1]

Don't worry...subsidies are on the way...they're free ya know...

 

[Antares]

Presidential fiat, it would have cost them the Senate.

 

[SteveH]

g5000,

I see your point. You think because I don't get a tax deduction that I am now paying higher taxes. My different perspective is that I could get the tax deductions, but in some cases chose not to. I could do everything that the other person has done to create their tax situation.

The government will always be involved in commerce. The government uses taxes to entice behavior for other reasons beyond monetary reasons. A free market will only take profits (from the sellers) and value (from the buyers) into consideration, right?

What if deductions for home buying isn't about the buying of an actual home. What if it is about stabilizing a community so that a marketplace can grow up around it? Or maybe as you imply, home buying has become so ingrained into our cultural norms that the deduction has outlived its usefulness.

I think food is a great example though. There is just no way that something like super convenient food, that tastes amazing, is addictive, is super cheap to produce, and creates tremendous profits will be self regulated by a free economy. I mean it already obviously is not. The sellers want to produce it for profits and the buyers receive a psychological signal from their brain telling them that it is super delicious. That signal is stronger than the desire to be "healthy". Just look around. No one worries that they might become diabetic or have a heart attack until someone tells them they are diabetic or they just had a heart attack.

Heck aren't there labels on cigarettes that basically say, "Warning! Smoking this will kill you." Yet people still buy them, get cancer, become uninsurable, and need to be covered by the ACA. I think the cigarette companies are still doing pretty OK. Even with hefty taxes on cigarettes. I think less people are smoking these days. In fact I think considerably less people are smoking. Can we slap the same warnings and taxes on cookies? People still have choice, but are encouraged to make a better choice.

I spend a lot of money, time, and effort to make sure I am healthy. I eat locally grown organic meats and vegetables. They aren't cheap. I'm regularly paying $8 a pound for chicken. Or $18 bucks for a steak that I still have to cook myself. I look for pastured eggs. I work out 4-5 days per week. I buy and read books on health. I make sure I get 8 hours of sleep per night. I stretch. AND I don't do this stuff for a living. I'd just rather be healthy and not need insurance unless something catastrophic happens instead of fat and feeling like shit waiting until my next doctor's appointment.

I'm paying for my health already. I'm going to be penalized for going above and beyond to be healthy. It's not luck I work at it.

I understand you want the government out of everything. I can be on board with that too. I think government should #1 protect me from foreign invasion after that I can be persuaded to let the private sector take care of things.

I just think that is unrealistic. You can want it, but you aren't going to get it.

My different perspective is that I want the government to entice through the tax code positive behavior like "being healthy".

If we are trying to fix the health care system with ACA, wouldn't it make more sense to just make people healthy instead? If the majority of the country was active, eating healthy food, and hovering around 20% body fat I think the health care system would be fixed.

In fact I think health care expenses would go down.