At first glance, the delay of the employer mandate seems like a complicated but innocuous change to the implementation of Obamacare. Many Democrats and backers of the Affordable Care Act (ACA) have been attempting to label it as a fairly minor provision since the mandate was put into place only for businesses with greater than 50 employees.

But let’s face it – government policies play a large role in business decisions. The continued ambiguity of the law and its compliance requirements are creating headaches for business owners. This is NOT the first time a kink has occurred:

• 1099 Tax Reporting Requirement
• Basic Health Plan
• CLASS Act
• Co-ops Defunded
• Electronic Notices for Medicaid
• Employee Free Choice Voucher Program
• HHS anti-conscience Mandate
• Income Verification
• IRS Affordability Determination
• Medicaid Expansion
• PCIP
• Small Business Exchanges (SHOP)

ALL of the above have also been affected by delays, repeals, changes and glitches since implementation began.

The Obama administration and Democrats ardently deny that this employer mandate delay, announced on an obscure federal blog during the July 4th recess, was politically motivated. Well okay, maybe the agencies were just not ready to implement, but surely it must “help” that the ripple effect of Obamacare turmoil will now be pushed conveniently past the upcoming midterm elections.

Furthermore, Republicans are now calling for the delay of the individual mandate and blaming Democrats for putting big business before the interests of ordinary Americans and families.

While the partisan politics and bickering plays out in DC, there will be 5 inevitable effects of this mandate delay:

1.     Gives the treasury department more time to implement the law

But, this delay will cost about $10 billion dollars in revenue from deferred penalties according to the CBO.

2.     No verification for subsidized coverage eligibility in marketplace exchanges

No income verification opens the door for subsidy fraud. Centers for Medicare and Medicaid Services will rely on applicants’ attestations and evoke the honor system. The ACA’s individual mandate is effectively invalidated for the coming year because it only works if the government can verify whether or not a worker is full-time and the employer-sponsored insurance is affordable. The Congressional Budget Office has estimated that some 20 million Americans will be eligible for subsidies by 2023.

3.     Highly incentivizes staying beneath the 50-worker threshold for businesses

This will hurt job growth in our recovering economy. The full-time to part-time shift occurring currently is an interesting move to turn away from the burdens of Obamacare. This delay essentially gives employers an additional year to restructure their work forces.

4.     Postpones addressing the mandate’s inherent problems

Look-back rules: The requirement will force employers to begin tracking the hours of salaried workers, creating major paperwork hassles.

Affordability determination: The determination of “affordable” will be difficult. In the law, affordable coverage has been defined as 9.5% of household income. The test has been modified by the IRS to individual wage income. This basically exempts seven million multiple jobholders.

Aggregation: This rule attempts to prohibit small employers from sub-dividing their firms into multiple parts in order to avoid the mandate. What if business owners want to do that for other reasons? Is Obamacare going to stop them?

5.     Boost enrollment state-based insurance exchanges

Pent up frustration over this delay will cause more employers to dump employees onto state insurance marketplaces. This is both good and bad: good, because it will force people away from the antiquated notion that insurance should be tied with employment; bad, because the exchanges are proving to be significantly costlier than expected. They also have some delays of their own in many states due to capricious HHS guidelines.

So there you have it. The delay is not as minor as others may make it seem.

Obamacare is like a complex machine. We are finding out now that quite a few parts are unworkable. The problem is, fixing each part means affecting another.