[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]







                   THE DELAY OF THE EMPLOYER MANDATE
                  PENALTIES AND REPORTING REQUIREMENTS

=======================================================================

                                HEARING

                               before the

                         SUBCOMMITTEE ON HEALTH

                                 of the

                      COMMITTEE ON WAYS AND MEANS
                     U.S. HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             JULY 17, 2013

                               __________

                          Serial No. 113-HL07

                               __________

         Printed for the use of the Committee on Ways and Means




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                      COMMITTEE ON WAYS AND MEANS

                     DAVE CAMP, Michigan, Chairman

SAM JOHNSON, Texas                   SANDER M. LEVIN, Michigan
KEVIN BRADY, Texas                   CHARLES B. RANGEL, New York
PAUL RYAN, Wisconsin                 JIM MCDERMOTT, Washington
DEVIN NUNES, California              JOHN LEWIS, Georgia
PATRICK J. TIBERI, Ohio              RICHARD E. NEAL, Massachusetts
DAVID G. REICHERT, Washington        XAVIER BECERRA, California
CHARLES W. BOUSTANY, JR., Louisiana  LLOYD DOGGETT, Texas
PETER J. ROSKAM, Illinois            MIKE THOMPSON, California
JIM GERLACH, Pennsylvania            JOHN B. LARSON, Connecticut
TOM PRICE, Georgia                   EARL BLUMENAUER, Oregon
VERN BUCHANAN, Florida               RON KIND, Wisconsin
ADRIAN SMITH, Nebraska               BILL PASCRELL, JR., New Jersey
AARON SCHOCK, Illinois               JOSEPH CROWLEY, New York
LYNN JENKINS, Kansas                 ALLYSON SCHWARTZ, Pennsylvania
ERIK PAULSEN, Minnesota              DANNY DAVIS, Illinois
KENNY MARCHANT, Texas                LINDA SANCHEZ, California
DIANE BLACK, Tennessee
TOM REED, New York
TODD YOUNG, Indiana
MIKE KELLY, Pennsylvania
TIM GRIFFIN, Arkansas
JIM RENACCI, Ohio

        Jennifer M. Safavian, Staff Director and General Counsel

                  Janice Mays, Minority Chief Counsel

                                 ______

                         SUBCOMMITTEE ON HEALTH

                      KEVIN BRADY, Texas, Chairman

SAM JOHNSON, Texas                   JIM MCDERMOTT, Washington
PAUL RYAN, Wisconsin                 MIKE THOMPSON, California
DEVIN NUNES, California              RON KIND, Wisconsin
PETER J. ROSKAM, Illinois            EARL BLUMENAUER, Oregon
JIM GERLACH, Pennsylvania            BILL PASCRELL, JR., New Jersey
TOM PRICE, Georgia
VERN BUCHANAN, Florida
ADRIAN SMITH, Nebraska

























                            C O N T E N T S

                               __________

                                                                   Page

Advisory of July 17, 2013 announcing the hearing.................     2

                                WITNESS

J. Mark Iwry, Senior Advisor to the Secretary and Deputy 
  Assistant Sec- 
  retary for Retirement and Health Policy, U.S. Department of the 
  Treasury.......................................................     7
 
                   THE DELAY OF THE EMPLOYER MANDATE
                  PENALTIES AND REPORTING REQUIREMENTS

                              ----------                              


                        WEDNESDAY, JULY 17, 2013

             U.S. House of Representatives,
                       Committee on Ways and Means,
                                    Subcommittee on Health,
                                                    Washington, DC.

    The Subcommittee met, pursuant to notice, at 10:00 a.m., in 
Room 1100, Longworth House Office Building, Hon. Kevin Brady 
[Chairman of the Subcommittee] presiding.
    [The advisory announcing the hearing follows:]

ADVISORY

FROM THE 
COMMITTEE
 ON WAYS 
AND 
MEANS

                         SUBCOMMITTEE ON HEALTH

                                                CONTACT: (202) 225-3625
FOR IMMEDIATE RELEASE
Wednesday, July 10, 2013
No. HL-07

               Chairman Brady Announces Second Hearing on

              the Delay of the Employer Mandate Penalties

                       and Reporting Requirements

    House Ways and Means Health Subcommittee Chairman Kevin Brady (R-
TX) today announced that the Subcommittee on Health will hold a hearing 
on the Obama Administration's recent decision to delay the information 
reporting requirements and penalties associated with the employer 
mandate in the Affordable Care Act until 2015. This hearing will allow 
the Subcommittee to hear directly from the U.S. Department of the 
Treasury (Treasury) about its decision to not enforce statutory 
provisions in law. The Subcommittee will hear testimony from J. Mark 
Iwry, Senior Advisor to the Secretary and Deputy Assistant Secretary 
for Retirement and Health Policy. The hearing will take place on 
Wednesday, July 17, 2013, in 1100 Longworth House Office Building, 
beginning at 10:00 a.m.
      
    In view of the limited time available to hear from the witness, 
oral testimony at this hearing will be from the invited witness only. 
However, any individual or organization not scheduled for an appearance 
may submit a written statement for consideration by the Committee and 
for inclusion in the printed record of the hearing.
      

BACKGROUND:

      
    On Tuesday July 2, 2013, a posting on Treasury's tax blog announced 
that the employer reporting requirements and the employer mandate tax 
penalties ``will not apply until 2015.'' The announcement came as a 
surprise to opponents and proponents of the law, and it raises new 
questions about how the shift will affect other aspects of the 
Affordable Care Act. The hearing will examine what led to the decision 
to delay the employer mandate, what authority Treasury relied on to 
delay statutory provisions dates and Treasury's analysis of how the 
delay will affect implementation of other provisions of the healthcare 
law.
      
    This hearing follows a July 10, 2013, Subcommittee hearing 
examining the impact of a delay of the employer mandate reporting and 
penalties provisions on jobs and the economy. This hearing raised 
additional questions about the Administration's decision and legal 
authority to render such action and highlighted the need for further 
regulatory guidance from the Department.
      
    In announcing the hearing, Chairman Brady stated, ``Our hearing 
today showed that businesses and their employees are grappling with the 
effects of this ruling, potentially putting not only their financial 
security at risk, but also their health security. This is too big of a 
decision to put in a `blog' post. The Treasury Department owes American 
families, businesses and this Committee answers. The White House also 
needs to come clean with the American people: If ObamaCare is not 
ready, as this decision implies, then why didn't the Administration 
delay both the employer mandate and the individual mandate? It is a 
reasonable question, and the Administration ought to be prepared to 
answer that very question--for Congress, and more importantly, for 
families across America struggling under this law.''
      

FOCUS OF THE HEARING:

      
    The hearing will focus on the Obama Administration's decision to 
delay the penalties for the employer mandate and the employer 
information reporting requirements under the Affordable Care Act.

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:

      
    Please Note: Any person(s) and/or organization(s) wishing to submit 
for the hearing record must follow the appropriate link on the hearing 
page of the Committee website and complete the informational forms. 
From the Committee homepage, http://waysandmeans.house.gov, select 
``Hearings.'' Select the hearing for which you would like to submit, 
and click on the link entitled, ``Click here to provide a submission 
for the record.'' Once you have followed the online instructions, 
submit all requested information. ATTACH your submission as a Word 
document, in compliance with the formatting requirements listed below, 
by the close of business on Wednesday, July 31, 2013. Finally, please 
note that due to the change in House mail policy, the U.S. Capitol 
Police will refuse sealed-package deliveries to all House Office 
Buildings. For questions, or if you encounter technical problems, 
please call (202) 225-1721 or (202) 225-3625.
      

FORMATTING REQUIREMENTS:

      
    The Committee relies on electronic submissions for printing the 
official hearing record. As always, submissions will be included in the 
record according to the discretion of the Committee. The Committee will 
not alter the content of your submission, but we reserve the right to 
format it according to our guidelines. Any submission provided to the 
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written comments must conform to the guidelines listed below. Any 
submission or supplementary item not in compliance with these 
guidelines will not be printed, but will be maintained in the Committee 
files for review and use by the Committee.
      
    1. All submissions and supplementary materials must be provided in 
Word format and MUST NOT exceed a total of 10 pages, including 
attachments. Witnesses and submitters are advised that the Committee 
relies on electronic submissions for printing the official hearing 
record.
      
    2. Copies of whole documents submitted as exhibit material will not 
be accepted for printing. Instead, exhibit material should be 
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or organizations on whose behalf the witness appears. A supplemental 
sheet must accompany each submission listing the name, company, 
address, telephone, and fax numbers of each witness.
      
    The Committee seeks to make its facilities accessible to persons 
with disabilities. If you are in need of special accommodations, please 
call 202-225-1721 or 202-226-3411 TDD/TTY in advance of the event (four 
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materials in alternative formats) may be directed to the Committee as 
noted above.
      
    Note: All Committee advisories and news releases are available on 
the World Wide Web at http://www.waysandmeans.house.gov/.

                                 

    Chairman BRADY. The Subcommittee will come to order. This 
is our second hearing on the controversial decision by the 
Treasury Department to delay for 1 year President Obama's 
Affordable Care Act mandate, forcing local businesses to offer 
Government approved health care or pay a tax.
    Today at last we will hear directly from the Treasury 
Department.
    What families and workers in my District are asking is 
this: Is it not unfair to grant business relief from the 
Government mandate but still force average workers to comply 
with the mandate? If the President's healthcare law is not 
ready for business, how is it ready for my family, my child, my 
loved one?
    That has both families and workers worried and wondering 
why the White House is not listening to us. This is not fair.
    The President has proclaimed, ``The law is working the way 
it is supposed to,'' and the White House, Treasury and Health 
and Human Services continue to repeatedly assure the public 
everything is on schedule.
    Here is what is not on schedule--the Class Act, repealed, 
the 1099 business reporting requirement, repealed, small 
business exchanges, delayed, mandate on employers, delayed. The 
data hub, behind schedule. Income-verification, postponed. 
Employer insurance verification, delayed.
    This is the Affordable Care Act acting the way it is 
supposed to? While the goal of the July 4th holiday blog post 
was to down play the latest embarrassing admission of failure, 
it accomplished the opposite. It made clear ObamaCare is not 
ready. Nowhere near ready.
    While the temporary relief from the employer mandate was 
welcomed news, it did not solve the serious problems our local 
businesses are struggling with under ObamaCare. In fact, the 
President's healthcare law and this troubled implementation are 
causing more confusion and more uncertainty that will continue 
to stop local businesses from hiring.
    Workers are seeing fewer hours and smaller paychecks. That 
is not fair. Businesses are struggling to find the money to pay 
for higher healthcare costs under ObamaCare. That is not fair.
    Our neighbors are struggling to find full time work, more 
than 20 million of them in America, and are finding fewer jobs 
to apply for. That is not fair.
    Workers who depend on affordable health care for their 
families and loved ones do not get the same special treatment 
the businesses are getting from the White House. How is that 
fair? How are workers supposed to comply with the law?
    The Federal law says that before getting a subsidy, they 
have to determine if you have an offer of affordable coverage 
that meets the Government's approval. Are they supposed to 
contact their employer or their spouse's employer? What if they 
get it wrong?
    One witness last week laid it out very clearly. They can 
face a fine of up to $25,000.
    No wonder this law remains unpopular with Americans, with a 
poll saying 56 percent of Americans, a clear majority, want to 
see the individual mandate delayed. Even prominent labor union 
leaders are now predicting ObamaCare will shatter their 
healthcare benefits and destroy the backbone of the middle 
class.
    Why is the White House ignoring the voices of middle class 
Americans? Why are they not listening to average workers? This 
is Washington, so we can predict that some will attempt to 
dismiss these questions by saying it is all just politics, that 
Republicans are trying for the 38th or 39th time to repeal 
ObamaCare.
    Remember, it is the White House that delayed this important 
mandate, not Republicans.
    Others will claim the employer mandate is not really 
important, although in this very Committee, they fiercely 
defend the mandate as one of the twin pillars of ObamaCare.
    Still others will hysterically claim postponing the mandate 
will harm children with preexisting conditions and young people 
wanting to stay on their parents' plans until age 26, but of 
course, those laws stay firmly in place, if we treat workers 
the same as businesses have been treated by the White House.
    Today, the Treasury Department's acknowledgment that it is 
not ready for businesses is the first step. The obvious next 
step is to acknowledge the same problems exist under ObamaCare 
for individuals, and the same relief should be given to 
families and workers. That would be fair.
    Before I recognize Ranking Member, Dr. McDermott, for the 
purposes of an opening statement, I ask unanimous consent that 
all Members' written statements be included in the record. 
Without objection, so ordered.
    I now recognize Ranking Member, Dr. McDermott, for his 
opening statement.
    Mr. MCDERMOTT. Thank you, Mr. Chairman. Welcome, Mr. Iwry. 
I want to thank you for coming to talk to us today, although I 
cannot necessarily promise you a kind reception as you may have 
already had a glimmer.
    My Republican colleagues appear very upset by this decision 
despite its support by the business community. They are so 
upset that they have already run to the Floor and put bills out 
there to repeal all these mandates without having hearings. 
They are not even following the regular order in the Congress.
    They have decided to use this delay, which will not hinder 
the rest of implementation, to target a much more important 
provision of the Affordable Care Act, that is the individual 
mandate.
    It seems they have discovered in themselves a repressed 
populism they reserve for special occasions when it serves 
their no tax/no regulation agenda. Repeal and replace is a 
great way to tell voters what they want to hear.
    We are going to keep all the things you like, covering your 
kids until age 26, closing the prescription doughnut hole, 
banning the discrimination based on preexisting conditions, and 
get rid of all those things you do not like, eliminating free 
riders and telling employers to pay their fair share. That is 
what they are promising.
    This is easy to say because they do not intend to fulfill 
the ``replace'' part of it. If they did, they would have to 
come face to face with the hard truth that one makes the other. 
The individual mandate makes possible the ability to give 
people insurance. Guaranteed insurance coverage without a 
mandate is not insurance at all. It is just elected bill 
payment.
    Given the opportunity, who would not put off paying until 
they need to use their insurance if they knew they could get it 
at any time. Some States have tried to implement reform with 
all benefits and none of the costs.
    Washington State, my own State, has been through this, 
1993, we put in an universal mandate and we put in insurance 
reform that ended denial for preexisting conditions, without 
any leverage to keep healthy people on the insurance rolls, 
however, when they repealed the individual mandate, only the 
priciest patients remained and insurers began a financial death 
spiral.
    Under Mitt Romney, the Republican Presidential candidate, 
Massachusetts got it right with an individual mandate, employer 
mandate and subsidies, the uninsured rate was cut to 5.5 
percent. When the insurance industry had guaranteed customers, 
it could take everyone without decimating the market.
    Romney called the individual mandate ``The personal 
responsibility principle.'' Everybody in this country should be 
personally responsible for themselves to the extent they can, 
and explained that it was essential to ``getting everyone the 
health insurance they deserve and need.''
    While this may sound bipartisan now, we have to remember 
this idea of a mandate came from the right. George W. Bush used 
it to make his healthcare plan proposal work. In 2000, Jim 
McCleary, who sat on this Committee, was once the Chair of this 
Subcommittee and the Ranking Member of the Ways and Means 
Committee, as well as a member of the RNCC, he supported an 
individual mandate.
    Here is what he said. ``We need to think of a better way to 
deliver some health insurance to everybody in this country.'' 
As far as I am concerned, that means an individual mandate. 
Gingrich supported it. Indeed, the then Republican Minority 
made it the foundation of their alternative to the efforts by 
Mrs. Clinton in the early 1990s.
    All the way back to 1989, the Heritage Foundation, a think 
tank that no one would accuse of being moderate much less 
liberal, released a proposal with some credit as the mandate's 
first appearance.
    Even President Nixon relied on an employer mandate in his 
reform plan.
    Personal responsibility and eliminating free riders is 
usually, and I emphasize ``usually,'' the hallmark of 
conservative policy making. People should be responsible for 
themselves. The reason they want to get rid of a safety net, 
people should be responsible for themselves.
    After decades of Republican support for an individual 
mandate, what has changed? Republicans know that health reform 
only works if everyone has skin in the game.
    At some point, I have to ask, do they really want it to 
work? Do they want to help some Americans get affordable 
coverage?
    If you will not accept the Republican and ACA ideas, what 
is left? I never wanted a mandate personally. Asking the 
business community to be responsible for covering our insurance 
does not make much sense to me. I fought for a single payer 
system that recognizes that our Government has a social and 
financial stake in the health of all our citizens.
    The private insurer market system won. The Republicans won 
this debate when the ACA was put in the way it was. This is a 
compromise that we found, everyone participates, so no one is 
denied.
    Endless futile attempts to repeal will not help anyone nor 
do non-existent replacement plans. We have done this, this is 
the 38th time. We will do it this afternoon about 3:30 or 4:00.
    The American people deserve a healthcare system that works. 
Let's get on with the show and let people get the coverage they 
need and deserve.
    I yield back the balance of my time.
    Chairman BRADY. Today we will hear from Mr. Mark Iwry, 
Senior Advisor to the Secretary and Deputy Assistant Secretary 
for Retirement and Health Policy at the U.S. Department of the 
Treasury.
    Mr. Iwry, welcome, and you are recognized for 5 minutes.

STATEMENT OF J. MARK IWRY, SENIOR ADVISOR TO THE SECRETARY AND 
 DEPUTY ASSISTANT SECRETARY FOR RETIREMENT AND HEALTH POLICY, 
                U.S. DEPARTMENT OF THE TREASURY

    Mr. IWRY. Thank you, Mr. Chairman. Chairman Brady, Ranking 
Member, Dr. McDermott, Members of the Subcommittee, good 
morning. Appreciate the opportunity to testify on the recent 
decision to provide transition relief with respect to certain 
requirements of the Affordable Care Act.
    On July 2, the Treasury Department announced that it would 
provide 1-year transition relief for 2014 with respect to three 
provisions that were added to the Internal Revenue Code by the 
Affordable Care Act.
    First, the information reporting requirements for insurance 
companies, self-insuring employers, and other entities that 
provide health coverage.
    Second, the information reporting requirements for 
employers that are subject to the employer shared 
responsibility provisions, and third, the employer shared 
responsibility provisions.
    On July 9, we published formal guidance, Notice 2013-45, 
that provides and describes this transition relief.
    Treasury is providing the transition relief after reviewing 
written comments on the employer and insurer information 
reporting requirements and after related discussions with 
employers and other stakeholders.
    Employers and their representatives have requested 
transition relief for 2014 because of concerns about the 
difficulty or costs of complying with the reporting 
requirements, the desire that reporting be simplified and the 
lead times necessary to adapt information gathering and 
reporting systems and implement reporting effectively.
    We recognize the vast majority of employers that will need 
to do this reporting already provide health coverage to their 
workers and we want to make sure employers will be able to 
comply with reporting effectively and efficiently.
    To address these concerns, Treasury announced that an 
additional year, 2014, will be provided before the employer and 
insurer reporting requirements begin, and this is designed to 
meet two primary concerns that stakeholders have expressed.
    First, to allow for additional dialogue on and 
consideration of ways to simplify the new reporting process, 
consistent with effective implementation of the law.
    Second, to give employers more time which many have 
requested to adapt health coverage and reporting systems as 
they move forward toward making coverage available and 
accessible to their workforce.
    Once reporting rules have been issued, employers and other 
reporting entities are encouraged to report voluntarily in 
2014, and allowing time for real world testing of reporting 
systems that year will contribute to a smoother transition to 
full implementation in 2015.
    Employer reporting is integral to administration of the 
shared responsibility provisions for employers and because of 
the 2014 transition relief for reporting, it generally will not 
be possible for the IRS to match up the information from 
employers with the information about individuals claiming a 
premium tax credit for 2014 with the result that the transition 
relief for reporting will make it impractical to determine 
which employers owe a shared responsibility payment for 2014.
    Accordingly, we have extended the transition relief to the 
employer shared responsibility provisions so that no payments 
of that sort will be assessed for 2014.
    In preparation for the application of the reporting and 
employer responsibility provisions in 2015, employers and 
others are encouraged to voluntarily report in 2014 and to 
maintain and expand health coverage in 2014.
    The transition relief does not affect employees or other 
individuals' access to premium tax credits available in 2014. 
People will continue to be eligible for a premium tax credit by 
enrolling in a qualified plan in the marketplace if their 
household income is within a specified range, nor does this 
transition relief affect the effective date of other ACA 
provisions, including the individual responsibility provisions 
and the insurance market reforms.
    While the 2014 transition relief for reporting by employers 
would make it impractical to implement the employer 
responsibility provisions, it would not have a comparable 
effect on implementation of the individual responsibility 
provisions, which as a practical matter are necessary for 
implementing the ACA's insurance market reforms that guarantee 
access to affordable insurance for individuals.
    As you know, this Act is projected to provide coverage for 
tens of millions of Americans and Treasury is implementing 
together with other departments to build on the progress 
already made to better and more affordable coverage.
    We appreciate the opportunity to further work with the 
Committee to achieve these objectives, and I look forward to 
answering your questions.
    [The prepared statement of Mr. Iwry follows:]
    
   [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] 

                               
    Chairman BRADY. Thank you, Mr. Iwry. The American Congress 
learned of this controversial decision via an obscure blog post 
on the eve of the 4th of July, July 2 to be exact. This is a 
major blockbuster decision. It was not made in just one 
afternoon.
    When did the Treasury Department make the final decision 
that ObamaCare was not ready for businesses?
    Mr. IWRY. Mr. Chairman, let me start by saying that my 
responsibilities relate to policy, health tax policy. There are 
others who are responsible for communications, media relations, 
congressional relations, public affairs.
    I would be happy to put you in touch with the appropriate 
people on detailed questions of the mode of announcement and 
timing.
    Chairman BRADY. Mr. Iwry, let me just say you are very well 
respected in the policy area, you have a long and distinguished 
record. That is why we are very pleased you are here.
    The title of this is ``Hearing on the delay of employer 
mandate.'' The timing is based on the policy, the decision that 
the policy would not be ready for businesses, and a 
postponement was appropriate.
    This is not a press issue. This is not a communication 
issue. When did Treasury make the final policy decision that 
ObamaCare would not be ready for individuals (sic) and must be 
postponed?
    Mr. IWRY. Mr. Chairman, Treasury made the decision that 
employers' requests for more time to comply with the reporting 
requirements were valid requests and meritorious shortly before 
this transition relief for employer reporting was announced.
    Chairman BRADY. Some time in June?
    Mr. IWRY. The decision was made, I would say yes, some time 
in June. It was considered for a while----
    Chairman BRADY. For a while before that.
    Mr. IWRY. For a while. It was very carefully thought 
through by a whole variety of----
    Chairman BRADY. Early June, mid-June, late June, just 
before the announcement?
    Mr. IWRY. I cannot really be more specific. The decision 
was made in a very deliberate way.
    Chairman BRADY. Sure.
    Mr. IWRY. It was obviously something that took into account 
an evolving body of evidence.
    Chairman BRADY. Sure.
    Mr. IWRY. Requests from employers, input from those who do 
the reporting.
    Chairman BRADY. Sure. Once the Treasury Department made 
that decision in June, when did it inform the White House of 
that very important decision?
    Mr. IWRY. There was a continual process of consultation as 
there typically is. This reflected the usual coordination 
between departments----
    Chairman BRADY. You are saying you kept the White House 
informed throughout the long deliberate considerations?
    Mr. IWRY. The White House was certainly informed and we 
coordinated on the analysis of whether this was an appropriate 
direction to go.
    Chairman BRADY. A couple of thoughts. I have questions 
about this whole timeline. I think the American public 
certainly does. On June 7, when the President proclaimed the 
law is working the way it is supposed to, had you already been 
in contact with the White House that you were considering 
delaying one of the twin pillars of his healthcare law?
    Mr. IWRY. Mr. Chairman, the marketplaces are on target to 
take enrollment on 1/1/14 and to start their open enrollment 
period on October 1, 2014.
    Chairman BRADY. I understand, we have been following the 
timeline very carefully because so many deadlines have been 
missed. The question was since you just testified you kept the 
White House informed throughout the whole deliberate process, 
was the White House aware of your decision to postpone this, a 
possibility, when the President told the American public, 
everything is great, it is working the way it is supposed to?
    I am just trying to understand if there is a disconnect 
between the Treasury and the White House in this area.
    Mr. IWRY. Mr. Chairman, the Treasury and the White House 
have been closely coordinating in this whole policy area as 
have the other departments that are involved, HHS, Department 
of Labor----
    Chairman BRADY. That has raised a great question. When did 
you inform HHS and the Secretary of your decision that 
ObamaCare would not be ready for businesses?
    Mr. IWRY. The decision, Mr. Chairman, respectfully, was to 
give employers more time.
    Chairman BRADY. For reporting, and therefore postpone it 
for 1 year. When did Treasury--again, we are thrilled you are 
here. You have a great reputation. We know you know this issue 
inside and out. There is no question about that. Because you 
know what the topic of the hearing is, when did the Treasury 
Department inform HHS?
    Mr. IWRY. Mr. Chairman, I have not been involved in all the 
conversations, all the meetings, all the phases of the decision 
making process.
    Chairman BRADY. I do not really expect any human being to 
be able to be in all those meetings, but when was HHS informed?
    Mr. IWRY. I would be happy to take that question back to 
the people who have been involved.
    Chairman BRADY. Right. Was any Member of Congress or their 
staff informed of this decision ahead of the July 2 blog post?
    Mr. IWRY. Again, Mr. Chairman, my role is not a 
congressional relations' role. I am not able to give you a good 
answer to that question, a reliable answer to that question. I 
will be more than happy to take that back.
    Chairman BRADY. Can I ask you this from a policy 
standpoint, clearly the decision was made that ObamaCare is not 
ready for businesses. As we sit here today, do you think the 
Affordable Care Act today is ready for implementation for 
workers and their families?
    Mr. IWRY. Definitely, Mr. Chairman.
    Chairman BRADY. It is definitely ready today? The exchanges 
are set up?
    Mr. IWRY. It is on the path today. It is not supposed to be 
implemented, of course, today. I take your question to be is it 
on the path to be ready when it needs to be ready on January 1, 
2014.
    Chairman BRADY. The reason I asked is you probably believe 
Treasury has the legal authority to postpone the employer 
mandate; correct?
    Mr. IWRY. I am confident we do.
    Chairman BRADY. You have the legal authority to postpone 
the individual mandate; correct? If you can do one, obviously 
you can do both.
    Mr. IWRY. Mr. Chairman, the questions of legal authority 
are ones we take very seriously and deliberately.
    Chairman BRADY. You obviously researched the one on the 
employer mandate, and the individual mandate is its twin 
brother, so the answer is yes, you probably believe you do?
    Mr. IWRY. We would not necessarily apply the same analysis 
to any other provision. The decision to provide transition 
relief, while one that Treasury as you know has taken on a 
variety of occasions under different Administrations----
    Chairman BRADY. I think what our big worry is you had the 
legal authority in your mind to postpone this for businesses, 
for Warren Buffett, and you knew at the time the individual 
mandate is not ready either. It is not available for workers.
    Why did you make the decision that Warren Buffett gets 
relief from ObamaCare but Joe Six Pack does not? Why does an 
average worker have to comply with the law on time, on 
schedule, but the businesses who have lobbyists and the ability 
to talk directly to you and the White House, why do they get 
relief and why did not the average workers today get the same 
relief?
    Mr. IWRY. Mr. Chairman, we believe workers today are 
getting a tremendous benefit from this law.
    Chairman BRADY. Did you see the letter from--do you think 
labor unions represent workers? Yes.
    Mr. IWRY. Of course, Mr. Chairman.
    Chairman BRADY. There you go, not a leading question, just 
kind of obvious. Labor unions have come out, leaders have come 
out full force this week saying ObamaCare will shatter their 
health care and undermine the backbone of middle class 
Americans.
    The majority of Americans are saying to the White House, 
look, we are worried. We want this postponed for us as well.
    Is the White House listening to the voices of average 
workers or just listening to the voices of business?
    Mr. IWRY. Mr. Chairman, the White House and the 
Administration as a whole is certainly listening to the voices 
of average workers, and in fact, it is the average workers who 
are the driving motivation for this very critical healthcare 
reform that provides premium tax credits----
    Chairman BRADY. They are asking to be treated as fairly as 
businesses are. Warren Buffett gets a break, Joe Six Pack does 
not, the single mom working at the restaurant does not.
    Final question. There are a lot of missed deadlines 
already. We expect there will be more. The Labor Day holiday is 
coming up. Are there any Twitter accounts of interns at 
Treasury we should be monitoring over the Labor Day weekend for 
any more announcements on the Affordable Care Act?
    Mr. IWRY. Mr. Chairman, if I may, the tax benefits of this 
law for individuals are of historic proportion. The insurance 
market reforms, eliminating preexisting condition exclusions 
and so forth are of historic significance.
    The focus really is on the American people.
    Chairman BRADY. Those provisions, by the way, and I know 
you verified this, stay in place if the individual mandate is 
also postponed; correct?
    Mr. IWRY. It is problematic.
    Chairman BRADY. The law stays in place because postponing 
the individual mandate has no impact on children age 26 or any 
of the other provisions of the law.
    Mr. IWRY. Mr. Chairman, I think policy, health policy 
experts across the political spectrum have made clear that if 
you do not have individual responsibility, personal individual 
responsibility to maintain health coverage, the key insurance 
market reforms that the American people deserve and are so 
eager to have will not be workable.
    Chairman BRADY. The health policy experts also say if you 
cannot verify your employer is offering affordable coverage or 
Government approved coverage, it is very difficult without 
major fraud possibilities to force workers to buy Government 
approved health care or pay a tax.
    Thank you, Mr. Iwry. Dr. McDermott.
    Mr. MCDERMOTT. Mr. Iwry, you are being treated to an old 
political trick. Confusion is the greatest way to kill 
something. My distinguished Chairman tries to confuse.
    The fact is that 95 percent of companies with over 50 
percent are now providing health coverage to their employees; 
is that correct?
    Mr. IWRY. Ninety-five percent of employers, approximately, 
with more than 50 employees are providing health coverage. Many 
of them have been doing so for a long time.
    Mr. MCDERMOTT. The experience in Massachusetts when they 
put in an employer mandate, did companies drop their insurance 
for their employees?
    Mr. IWRY. The evidence in Massachusetts, Dr. McDermott, 
suggests that companies did not drop their insurance, that in 
general, companies retained their coverage for employees.
    Mr. MCDERMOTT. In fact, the figures showed that they 
actually increased their coverage during that period of time. 
This business about an employer mandate being the linchpin 
where the whole tent comes down if we take that out is clearly 
not the issue.
    It is a reporting question of how many people you have 
working 35 or 40 or whatever hours and that kind of stuff.
    On the other hand, as you point out, the individual mandate 
is essential to the insurance principle. If you are going to 
cover everybody in this room, you have to have everybody in 
here paying into the program, on some level. Either the 
Government pays in through Medicaid or individuals pay in. 
Otherwise, if we had this whole group over here that just sits 
out and says I am not going to join this thing, I am going to 
wait until I get sick and then I am going to jump in, what is 
the effect on the insurance industry of having 10, 20, 15 
percent, whatever, sitting outside and jumping in every time 
they are sick?
    Mr. IWRY. We know, Dr. McDermott, that the effect of 
adverse election tends to be to drive up the costs for the 
insurer and hence the premiums for the individual. Without some 
protection against people waiting until they are sick to 
acquire the insurance and protection against people who then 
get better, drop the insurance after they feel they do not need 
the immediate care, that is really critical to the preexisting 
condition, the guaranteed availability of coverage, and the 
other fundamental insurance reforms that protect people.
    Mr. MCDERMOTT. That probably explains why Governor Romney, 
a noted conservative Republican, put the individual mandate 
into the program in Massachusetts, because he knew on an 
insurance basis, it would not work if you did not have 
everybody in.
    That has been the experience all across the country. 
Washington State in 1993 put in an individual mandate and 
guaranteed issue. We gave the two pieces. Then the legislature 
took out the individual mandate and left the guaranteed issue. 
Within 3 years, we had no individual sales, individual coverage 
in the State of Washington. All the companies left, every 
single one of them left.
    That is really what is at stake here it seems to me. To say 
the employer mandate is connected to that really is a ruse to 
get us into a big argument about bringing the whole program 
down.
    Is there anything that you feel you have not had a chance 
to explain? I will give you another minute or so.
    Mr. IWRY. There are a number of things, Dr. McDermott, and 
I am sure we will get to those. One point building on what you 
just said is that the guaranteed issue, that is the ability of 
people to get insurance, small businesses to be able to get 
insurance for their people, the guarantee that if you get sick, 
you will not be deprived of your health coverage, that the 
pricing will not be prohibitive because somebody in the small 
business workforce is sick or because the individual or someone 
in their family needs a lot of care, those insurance market 
reforms, including the protection from preexisting condition 
exclusions, will go into effect together with the marketplaces, 
the access to coverage, the tax benefits to assist people to 
afford coverage, all of that will go into effect at the 
beginning of 2014 as scheduled.
    As you point out, it is the employer reporting and 
responsibility that are getting transitioned.
    Chairman BRADY. Thank you, Mr. Iwry. The time has expired. 
Mr. Johnson.
    Mr. JOHNSON. Thank you, Mr. Chairman. Mr. Iwry, you have 
already answered some of the questions. You said the law is not 
working as it was supposed to and you decided to delay the 
employer mandate.
    Why was a blog post used to notify people about that 
significant change? Is that not an unusual method of passing 
along such important information?
    Mr. IWRY. Mr. Johnson, my responsibilities at Treasury are 
policy as opposed to communications. I was not involved in the 
decision as to how to accompany the formal guidance that in the 
usual way reflected a Treasury decision, how to accompany that 
with----
    Mr. JOHNSON. You do not control the way you announce 
things. Let me ask another question. The announcement of the 
delay in the employer mandate really came as a big surprise 
with less than 6 months to go before it was to be put into 
place. What do you think that means for business owners who are 
planning decisions as well, and do you think they now have more 
or less certainty as to where Federal policy is headed, and do 
you think they are more or less confused about what will be in 
place in 2015, and will it only be a year delay, could it be 2 
years or 5 years?
    Mr. IWRY. Mr. Johnson, I am happy to answer all of those 
questions.
    Mr. JOHNSON. Go ahead.
    Mr. IWRY. First of all, the business community was the ones 
that requested additional time. We listened to everybody, all 
the stakeholders, not just the business community, 
representatives of individuals, individuals themselves, people 
across the spectrum of those who are involved in our healthcare 
system.
    It was the employers who provide the vast majority of 
coverage to American workers who told us we could use a little 
more time, we are implementing these reporting provisions, we 
are implementing the systems we need for employer 
responsibility.
    In the course of our very extensive back and forth with 
them, Congressman, lots of interaction, they have increasingly 
over the past few months made the point that they need a little 
more time in order to implement this smoothly and they could 
use if possible some simplification or greater flexibility in 
the form or timing of the reporting provisions.
    Mr. JOHNSON. How many companies did you hear from?
    Mr. IWRY. We heard from both individual companies and 
associations that represent hundreds and thousands of 
companies. I know congressmen and Congress heard from them, 
too.
    There have been requests for more time to do the 
implementation from a wide range of organizations, particularly 
in the retail industry, in the restaurant sector, food service, 
but even more broadly across American industry, organizations 
like the Chamber of Commerce, the Retail Industry Leaders 
Association, the National Restaurant Association and the 
National Retail Federation.
    They have been saying for the last year, and indeed, have 
testified before Congress, that a little more time for 
implementation, a 1-year delay is what most of the ones asking 
for more time have focused on. A 1-year delay would make a 
tremendous difference in their ability to implement the system 
changes they need to make efficiently and smoothly for their 
workers and for all concerned.
    Mr. JOHNSON. Individuals do not have that same problem?
    Mr. IWRY. Congressman, individuals have a very different 
way of interacting with the system, all of which is geared to 
deliver benefits to them. I am happy to lay that out and 
discuss it with you and your colleagues.
    The individual reporting requirements are much more akin to 
what people do now on their 1040 tax returns.
    Mr. JOHNSON. Yes, it is just going to cost them more. Thank 
you. My time has expired.
    Chairman BRADY. Thank you. Mr. Thompson.
    Mr. THOMPSON. Thank you, Mr. Chairman. Thank you, Mr. Iwry, 
for being here today. I said this last week when we had a 
hearing. I am not particularly tickled by the delay but I would 
rather have the delay than rush this thing through and get 
something that does not work.
    The truth of the matter is this is working. We are seeing 
good results. I have a list of them that I was given today just 
in my District, 7,500 young adults in the District now have 
health through their parents' plans; more than 6,000 seniors 
are getting discounts on their prescription drugs; 100,000 
seniors and 194,000 individuals are able to have preventive 
services; 224,000 individuals are saving money through rebates 
from their insurance; 38,000 kids with preexisting conditions 
now have access to healthcare coverage.
    This is all good stuff. In the New York Times this morning, 
there was an article that says the States approved their rates 
for 2014 and they will see at least a 50 percent lower on 
average than those currently available in New York today.
    These are all indications that things are going in the 
right direction. I am okay with the delay to make sure they 
continue to go in the right direction.
    I have been having meetings in my District with business 
folks trying to provide information on how businesses and the 
employees of businesses can benefit by ObamaCare.
    I found it remarkable that the number of businesses that 
show up to my meetings with employees far lower than the 50 
full time employees, the overwhelming majority of people in 
these meetings, and they have no idea for the most part that 
they are under no employer responsibility provisions.
    As a matter of fact, when they come to these meetings for 
the first time, it seems many of them are finding out that not 
only do they not fall under this provision, but they may have 
access to a marketplace where they can get insurance for 
themselves and their employees at a much more competitive 
price.
    I have pointed out the New York Times' story. This is true. 
These lower rates are true in California, Oregon, Montana and 
the District of Columbia.
    I think we have a good story to tell. I would suggest that 
my colleagues on the other side of the aisle who are critical 
of this, instead of having more Floor votes to try to repeal 
the good work that we are trying to accomplish, that we do 
better outreach and make sure folks understand the benefits of 
this and help them get enrolled in these money saving 
healthcare providing programs that are out there.
    You had mentioned in both your testimony and I think to one 
of the questions that the number of employees that are affected 
by the employer responsibility portion, I think you said 95 
percent of employers have fewer than 50 full time employees, is 
that correct?
    Mr. IWRY. Approximately.
    Mr. THOMPSON. We are talking about 5 percent of employees 
that are impacted by this provision.
    Mr. IWRY. Congressman, it is 95 percent of employers 
roughly have less than the 50 employee workforce. The number of 
employees, of course, is different because there are a lot of 
employees concentrated in businesses of different sizes, not 
uniformly distributed.
    I think your point is very well taken, that the majority of 
employers are either not subject to this employer 
responsibility at all or in the case of the employers that are 
over 50 in terms of their workforce and are subject to employer 
responsibility to offer coverage, 95 percent or so of those 
have been providing coverage, already provide coverage to their 
workforce.
    Mr. THOMPSON. The businesses that have contacted you, the 
businesses you are working cooperatively with in postponing for 
a year this provision, what is it they are looking for? Why do 
they want this delay?
    Is it because they think Congress is going to repeal 
ObamaCare or they want to make it work for their employees?
    Chairman BRADY. Mr. Iwry, time has expired, if you could 
respond in writing to Mr. Thompson's question.
    Mr. THOMPSON. Thank you, Mr. Chairman.
    Chairman BRADY. Mr. Ryan.
    Mr. RYAN. Thank you. Mr. Iwry, I have a couple of tracks I 
want to go down. I am going to ask you some basic specific 
questions, if you can give me some brief specific answers, I 
would appreciate that because we only have 5 minutes.
    The law was sold on the pretext that it would not add to 
the deficit, that if you liked what you had, you could keep it 
with respect to your health insurance.
    I would like to assume that in doing your analysis to delay 
this, you ran other analyses as to what the effects would be on 
the economy, on Federal revenues, on health insurance and the 
like.
    Did the Administration do an analysis on the employer 
sponsored health insurance market and whether or not insurance 
coverage levels would be changed?
    Was there an analysis that looked into whether or not with 
the advent of ObamaCare and the imposition of the law employers 
are going to start dropping coverage?
    Mr. IWRY. Mr. Ryan, there was indeed a thorough analysis 
both within the Administration and as you know----
    Mr. RYAN. We are familiar with the private sector analyses 
that were done. Would you please share the Administration's 
analyses about the effects of the employer market that led to 
help make this decision?
    Mr. IWRY. As I was saying, sir, there was clearly analysis 
within the Administration of the impact of the Affordable Care 
Act as it was being considered by Congress, as well as 
extensive analysis, as you know by the Congressional Budget 
Office.
    Mr. RYAN. Right.
    Mr. IWRY. With the aid of the Joint Committee on Taxation, 
and by a myriad of private sector analysts, economists, 
experts, of the impact of the Affordable Care Act on jobs----
    Mr. RYAN. Jobs, revenues, spending. Was that analysis done 
by the Administration this year?
    Mr. IWRY. The analysis by the Administration is actually 
continual. The economists at Treasury, at CEA, OMB, and other 
offices within the Administration, including HHS----
    Mr. RYAN. I assume you would do that. What we are asking 
for is share that with us so we see what you saw which helped 
lead to this decision to delay the employer mandate.
    That is my request to you, share with us the 
Administration's analysis on revenues, on spending, on 
insurance coverage levels within the employer private system, 
so we can understand more that went into this decision.
    That is question one. You are nodding your head. We will 
expect that.
    Here is question two.
    Mr. IWRY. Congressman, if I may.
    Mr. RYAN. Yes.
    Mr. IWRY. The analysis is continual.
    Mr. RYAN. I understand that.
    Mr. IWRY. It is not there is necessarily a particular 
written report that is rendered at each point in time. The 
analysis of all the effects that you alluded to----
    Mr. RYAN. Clearly, you conducted an analysis to see the 
impact of this law and the reason for the delay. We would like 
to know what went into the decisions so we are better informed.
    Mr. IWRY. Of course, we will be more than happy to share 
with you what went into thinking----
    Mr. RYAN. Yes, okay. Stop, because we are running out of 
time. I do not want you to run the clock out on me.
    Here is my concern with only delaying the employer mandate 
and not the individual mandate. We have this new data hub that 
is supposed to be set up to verify a person's information. It 
connects information from HHS, the Internal Revenue Service, 
Social Security Administration, Homeland Security, Department 
of Justice, State governments and other Federal agencies. Big 
undertaking.
    If a person goes into the exchange and gets subsidies, to 
verify whether they qualify or not, they have to have been 
offered employer insurance. They have to have been offered 
employer insurance and if they have been offered adequate 
employer insurance, they cannot get subsidies.
    You also have an income rule which you are now allowing 
them to attest to their income.
    How can you not conclude you are not going to have a lot of 
fraud, a lot of confusion, a lot of abuse whereby individuals 
will get subsidized, exchange tax credits, when they were not 
qualified for it.
    Then when the mandate kicks in a year from now, you will 
reconcile the records and you will find that there are a lot of 
people in this country that signed up for exchange subsidies 
that they were not entitled to, the law makes them claw that 
back, so they will get a massive tax bill from the IRS, taxing 
them for the exchange subsidies that they were not entitled to, 
now that in 2015, you have this information.
    How is that not going to be the case if you only delay one 
of the mandates and not the other?
    Chairman BRADY. Mr. Iwry, time has expired, if you could 
answer that question either in writing or to another Member, 
that would be terrific.
    Mr. Kind is recognized.
    Mr. KIND. Thank you, Mr. Chairman. Mr. Iwry, thank you for 
your testimony and the work that you are doing.
    I imagine, just to get to Mr. Ryan's point, that it is not 
all that unlike people who file their tax returns, take certain 
deductions and expenditures, and there are possible audits that 
come from that. It is no different than what individuals or 
businesses do today.
    That is a whole other subject. I am also, like Mr. 
Thompson, in the category of applauding the Administration's 
decision in this regard, that we feel it is important to get it 
right than to do it fast. I applaud the Administration's 
outreach to businesses large and small, to individual 
businesses and the associations, when you are receiving 
feedback they need more time, that some of this stuff is a 
little bit complicated.
    My question is were you hearing from them that they cannot 
do this at all in the future or they just wanted some 
additional time in order to get their records and their systems 
in place so they can do a proper job of reporting this?
    Mr. IWRY. Mr. Kind, we were hearing from and Congress was 
hearing from broad segments of the plan sponsor community that 
they needed a little more time, and specifically, people such 
as representatives of the retail industries, food service and 
restaurant industries, and others within the business 
community, indicating they were adapting their systems, they 
were working on compliance with these requirements but needed a 
little more time.
    Mr. KIND. That response is not surprising to me because of 
my own individual outreach back home talking to businesses. I 
was hearing the same thing.
    There are some things that they need a little bit more time 
in order to work through it with their systems, but they think 
they can get there.
    Again, I find it a little bit humorous seeing these 
crocodile tears from the other side about staying on time and 
meeting the targets, and it's a failure.
    With that approach, I asked the Department of Health and 
Human Resources if they could calculate for me, are the 
provisions in the Affordable Care Act, roughly 400, that have 
to be either implemented already or are on track of being 
implemented, what percentage of those are they going to be able 
to hit the target on.
    Their response was out of the more than 400 ACA provisions 
that are funded in effect, the Administration has implemented 
or is scheduled to implement approximately 93 percent of them 
on time. Clearly, that is not 100 percent. I do not think 
anyone on this dias or any reasonable American would expect 
that a program as important as this, complex healthcare reform, 
would get 100 percent seamless transition with what needs to be 
done.
    The ability to make adjustments and to be flexible in doing 
this, I think, is going to be an important component of how 
much help businesses and individuals receive under healthcare 
reform. I think Treasury's decision reflects that practicality.
    The real news today is not this hearing that we are having 
yet again about the Administration's decision to delay the 
reporting requirements for businesses, the real news is what 
the New York Times reported that Mr. Thompson cited, health 
plan costs for New Yorkers set to fall 50 percent.
    Mr. Chairman, I would ask unanimous consent to have this 
article inserted in the record at this time.
    Chairman BRADY. Without objection.
    [The information submitted by the Honorable Ron Kind 
follows:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Mr. KIND. In that article, it states ``Beginning in 
October, individuals in New York City who now pay $1,000 a 
month or more for coverage will be able to shop for health 
insurance for as little as $308 monthly, and with Federal 
subsidies, the cost will be even lower.''
    This is what we are hearing from Oregon and places like 
Washington, California, Vermont, Maryland. This is what comes 
from the exchanges that is going to increase competition and 
transparency.
    Again, this is exactly what the exchanges are meant to 
accomplish and this is exactly the type of information that is 
coming back.
    Sometimes I wonder whether or not their greatest fear on 
the other side is not the delay and is not the hiccups but the 
fact that this has a chance of really being successful and 
helping businesses and individuals be able to obtain affordable 
and quality healthcare coverage.
    Mr. Thompson also recited a fact sheet that all of us were 
given about the impact of the Affordable Care Act on our 
individual districts, from individuals to seniors to 
businesses. My numbers line up pretty much with what Mr. 
Thompson was reciting as well, of the positive benefits that 
are already going on, that people are feeling and seeing 
directly because of the effect of healthcare reform.
    Mr. Chairman, I would ask again unanimous consent to have 
these fact sheets we were given today inserted into the record.
    Chairman BRADY. Without objection.
    [The information submitted by the Honorable Ron Kind 
follows:]


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Chairman BRADY. I also would like to put into the record 
the HHS compilation of the provisions that have been 
implemented so that the public can see that as well.
    Mr. KIND. Mr. Iwry, it just seems as if the Administration 
is just trying to take a pragmatic approach to this. They are 
not trying to rush things whose time may not be ready yet for 
implementation.
    That is certainly reflected in the outreach that you did, 
and again, I commend the Administration for listening to the 
businesses and associations and making this very reasonable and 
pragmatic decision.
    Chairman BRADY. Thank you. Time has expired.
    Mr. Roskam.
    Mr. ROSKAM. Thank you, Mr. Chairman. Mr. Iwry, on June 7, 
President Obama told the American public ``This is working the 
way it is supposed to,'' referring to the Affordable Care Act.
    As it turns out, that is not correct, is that not the 
point?
    Mr. IWRY. Respectfully, Mr. Roskam, I strongly disagree 
with that.
    Mr. ROSKAM. In your view, in other words, it is going just 
the way it was supposed to, it is working the way it is 
supposed to, and this delay was contemplated the way it was 
supposed to? Is that what you are testifying to today?
    Mr. IWRY. Congressman, the marketplaces will be----
    Mr. ROSKAM. Did he do the delay on purpose, was this 
contemplated, at the time we heard from Administration 
officials for the past several years that it is all on track, 
and in fact, the President put his personal imprimatur on this, 
this is working the way it is supposed to.
    Are you saying the individual mandate and the blog post 
release on July 2 is the way it was supposed to go? Is that 
your testimony?
    Mr. IWRY. Congressman, the individual mandate, the 
individual responsibility provisions, are fully on track.
    Mr. ROSKAM. How about the employer mandate? This is not 
supposed to be that tough. You are not making the 
representation that the employer mandate is going the way it is 
supposed to. You are not saying that, are you?
    Mr. IWRY. Congressman, this is a very ambitious 
legislative----
    Mr. ROSKAM. It was not supposed to be like this; right? It 
was not supposed to be there was a release of a blog post that 
said it is going to be delayed. You are not going down that 
cul-de-sac where you are defending this as part of a plan, that 
it is going exactly the way--I know you said you are not in the 
communications side of things and you are on the technical 
side.
    Can I just give you a recommendation? Do not defend the 
delay as being on purpose, at least you are acknowledging with 
me that this was not intentional; right?
    Mr. IWRY. Congressman, as I was saying, this is a very 
major piece of legislation.
    Mr. ROSKAM. It sure is.
    Mr. IWRY. Historic benefits to the American people. There 
are various significant parts to provide coverage to tens of 
millions of people who have not had it before.
    Mr. ROSKAM. The point is it was not on purpose, the timing 
of this was not on purpose, and the delay of the employer 
mandate was not something you contemplated.
    Moments ago, you were asked questions by the Chairman, what 
was the time line of this, and the communication, at least the 
representation to the Committee was this was basically a 
revelation, discussion and a decision that happened at Treasury 
with some consultation in the White House around June. Is that 
not right? Was that not your testimony?
    Mr. IWRY. Congressman, I believe the Chairman asked when 
the final decision was made as opposed to when the decision--
when the process of thinking about whether----
    Mr. ROSKAM. In other words, are you kidding me, did you 
have an inkling, did you have a foreshadowing that this was 
going to have to happen at the time when the President of the 
United States tells the American public it is working the way 
it is supposed to?
    Mr. IWRY. Congressman, the law as a whole is not something 
that I think anyone would have expected.
    Mr. ROSKAM. All right, there you go. Thank you for 
acknowledging that. Let me focus your attention on a statement 
you made a couple of minutes ago to Mr. Johnson.
    You said individuals have a different way of interacting 
with the system. They sure do. To follow up on Mr. Ryan's 
point, if individuals, who are not represented by anybody 
except us, they do not have lobbyists, they are not part of 
some big coalition, they are just individuals, if they get on 
the wrong side of the law based on the characterization that 
Mr. Ryan had, here is what happens to them, and this is 
according to Mr. Jost who was a Democrat witness last week.
    He said ``There are serious consequences for applicants who 
misrepresent their employer coverage, applicants who receive 
tax credits for which they are ineligible, they will have to 
pay them back when they file their taxes.''; Mr. Ryan's point. 
Negligent misrepresentation of eligibility information can cost 
a $25,000 fine. Here is a tax form that the IRS requires under 
penalties of perjury, representations under penalties of 
perjury, a criminal act, and yet you seem like you are very 
cavalier about this, this risk, this different way that 
individuals have of interacting with the system.
    Yes. They are more on their own. I yield back.
    Chairman BRADY. Thank you. Mr. Blumenauer is recognized.
    Mr. BLUMENAUER. Thank you, Mr. Chairman.
    It has been interesting, sort of. I have tried to distance 
myself for a moment as I have listened to the back and forth, 
and wondering what this would look like from a normal person 
from a distance.
    This controversial decision is controversial because people 
claim it is controversial. The notion somehow that we take 5 
percent of the businesses who represent 1 percent of American 
employment and there is a year delay, is not earth-shattering.
    This is not something I would think, as my friends have 
tried on a piecemeal basis--I notice my good friend the 
Chairman could not even reference exactly how many times they 
have tried to repeal it--that somehow a small portion of the 
bill being delayed for a year creates such trauma and drama 
would be hard, I think, for a normal person to really create 
into some sort of massive controversy that merits drilling into 
the bureaucracy, the timing, trying to parse a general 
statement from the President about the bill working as 
intended.
    To somehow that each tiny detail is exactly as contemplated 
is foolish. And we can do this with any of the landmark 
legislation that some of my Republican friends may be proud of 
and ask if every single detail is exactly as was contemplated. 
No revisions? No change? No modification? Of course not. That 
is hokum.
    I am from one of those States where people have not spent 
all their time trying to derail it. And there are some that 
have. But in Oregon--and I would ask, Mr. Chairman, unanimous 
consent to enter into the record two articles about how it is 
working in Oregon.
    Chairman BRADY. Without objection.
    [The information submitted by the Honorable Earl Blumenauer 
follows:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Mr. BLUMENAUER. How insurance rates have dropped. How 
thousands of people in my district are benefitting. And I would 
like to be included in Mr. Kind's unanimous consent because I 
think this is important.
    The goal here ought to be to work to make health care more 
affordable and more effective for American people. We are 
burdened in this country, paying almost twice as much as any 
other country in the world for results, on average, that are 
mediocre. We get sick more often. We take longer to get well. 
And we die sooner than some of those countries that my friends 
on the other side of the aisle have denigrated when we were in 
the process of debating healthcare reform.
    In my State, we are making some progress. In my State, if 
everybody practiced medicine the way it is in my metropolitan 
area, we would live longer. We would not get sick as often. We 
would get well quicker. And we would not have a Medicare 
funding crisis.
    This hearing is an example of why we are going to be 
continually stumbling forward, because the goal of some people 
in Congress is for the bill to fail. They did not work with us 
in a bipartisan way to try to refine it; there are changes that 
I would make.
    I think this bill is maybe a B-minus. And it is not enacted 
the way that anybody in America would have done so, but we had 
a complete breakdown in the legislative process in the Senate, 
so it had to be adopted via reconciliation. And since then, no 
plan from my friends, who talk about repealing and replacing--
no plan that would come even close; and trying to put sand in 
the gears in every instance.
    I think that is unfortunate. Planning for legislation to 
fail and make it harder on American employers, the healthcare 
system, and the people we represent, I think, is a sad 
expression of politics today. But in my State, look at the 
results.
    Chairman BRADY. All time has expired.
    Mr. BLUMENAUER. You could do it in yours. Thank you. I 
yield back.
    Chairman BRADY. Mr. Gerlach is recognized.
    Mr. GERLACH. Thank you, Mr. Chairman. Thank you for 
testifying today, Mr. Iwry.
    I want to go back to the individual mandate provisions of 
the act relative to the employer mandate provisions, which 
under this notice has been suspended until 2015. The testimony 
you presented here today as well as prior correspondence from 
the Department of Treasury cites the legal authority for the 
delay in the employer mandate as being Section 7805(a), which 
is a general provision giving the Secretary of Treasury the 
ability to, in essence, promulgate rules and regulations for 
the enforcement of the title, as well as doing things necessary 
by reason of any alteration of law, a pretty general 
prescription of authority and what you call in your testimony 
longstanding administrative to grant transition relief.
    Based upon that authority, Section 7805, would you not 
agree, then, that the Department of Treasury also has the 
ability under that section to suspend the employee mandate of 
the law?
    Mr. IWRY. Congressman, we have not analyzed the question 
whether that different provision, the individual responsibility 
provision, is one that we would have authority to provide 
transition relief for because the----
    Mr. GERLACH. Is there any specific other provision in the 
act or any other prior decision by the Department or any other 
rule or regulation that would prohibit you from delaying the 
individual mandate compared to just using Section 7805 
authority to suspend the employer mandate?
    It seems like it is a pretty broad license of authority 
under that section. So why would that section not also apply to 
the individual mandate?
    Mr. IWRY. Congressman, the authority you are referring to 
under 7805(a), in particular, when used to provide transition 
relief with respect to the timing of implementation of a 
statute, is exercised very carefully in order to provide in 
circumstances where the facts make it clear that the statute 
presents--that the timing without a transition relief 
provision, that the timing would present administrative 
difficulties that are very considerable.
    Mr. GERLACH. My colleague, Mr. Roskam, and prior to him Mr. 
Ryan, highlighted the problems that individuals, if they 
continue to face the mandate, may experience relative to 
penalties in the future.
    So the question is, by way of fairness, is it fair to 
suspend the mandate on employers but not suspend the mandate on 
employees? And I would note a July 9th letter to Chairman Fred 
Upton of the Energy and Commerce Committee from the Department 
of Treasury indicating that on prior occasions, that same 
Section 7805 was used by the Department to relieve 
responsibility for payment of taxes in air transportation 
services and in other situations.
    So given the fact that the Supreme Court has ruled that 
this individual mandate is in fact a tax, and the fact that 
this Section 7805 has been used in the past by the Department 
to relieve individual taxpayers of taxpayer responsibility 
because, at the discretion of the Department, it was an 
important thing to do, why is it not fair to individuals now 
under the Affordable Care Act to have their mandate of taxes be 
relieved and suspended while the employer mandate is also being 
suspended when you clearly have the authority, the discretion 
under 7805, to do that?
    Mr. IWRY. Congressman, the decision to provide transition 
relief in response to the requests from those in the plan 
sponsor community for more time to complete the successful and 
efficient implementation of their reporting systems was made 
very deliberately after assessing the credibility of those----
    Mr. GERLACH. And you made mention in the last few minutes 
about the number of different employers that contacted you 
about that need. Did you get any input from individuals about 
the need to not have an individual mandate placed upon them? 
Did you get anything on your website, in mail, emails, from 
individuals around the country that did not want to see this 
individual mandate implemented?
    Chairman BRADY. Time has expired. If you could answer that 
question in writing, sir, I would appreciate it very much.
    Mr. Pascrell is recognized.
    Mr. PASCRELL. Thank you, Mr. Chairman. And Mr. Chairman, I 
have got to give credit where credit is due. You run a very 
civil discussion, questions. But it is pretty bizarre when you 
think about here we are again trying to undermine the law, when 
you come right down to it.
    Chairman BRADY. You had me on the first part of that 
statement.
    Mr. PASCRELL. I meant it.
    The Affordable Care Act is complex, no question about it. 
It was passed. It contains skyrocketing costs. We could not 
sustain the system as it was. Many companies are going 
bankrupt, and to give uninsured Americans access to affordable 
health coverage. And I think we need to ensure that that is 
done. That should be our priority.
    This delay should not be just another excuse for 
obstructionism. I think we should be working to ensure that 
this law is implemented effectively. It seems more productive 
to me than voting over 38 times to repeal it.
    Mr. Iwry, thank you for participating today. You are a 
senior advisor in the Treasury Department to the Secretary. 
Correct?
    Mr. IWRY. Correct, Congressman.
    Mr. PASCRELL. Many of my friends on the other side of the 
aisle are asking why the Administration would delay this 
component of the law and not delay the individual mandate. They 
are fond of a talking point that says that if the 
Administration is delaying the employer mandate, they should 
delay the individual mandate. You have heard that many times.
    This is comparing, to me, apples to refrigerators on a 
scale and scope quite different. How many businesses does the 
employer mandate impact?
    Mr. IWRY. Congressman, I do not have that exact figure with 
me, but we would be happy to get back to you with an answer. 
But it is, as you know, 95 percent of the American employer 
community that is smaller than 50 employees and therefore is 
not subject to the employer mandate.
    Mr. PASCRELL. Well, if we apply that----
    Mr. IWRY. That is, 95 percent of businesses are not subject 
to the employer responsibilities.
    Mr. PASCRELL. If we apply those numbers, it is about 10,000 
businesses, in my math. It comes to that figure. Is that far 
off or am I in the ballpark?
    Mr. IWRY. Happy to confirm that or check that for you, 
Congressman.
    Mr. PASCRELL. Would you do that? Which is 1 percent of the 
workers. Correct?
    Mr. IWRY. Congressman, it is about 5 percent of the 
employers that are large enough----
    Mr. PASCRELL. I am talking about the workers now.
    Mr. IWRY. Right. When it comes to workers, the percentages 
are different----
    Mr. PASCRELL. Right.
    Mr. IWRY [continuing]. And I do not have them in front of 
me. But of the 5 percent of the employers, 95 percent of those 
already provide coverage.
    Mr. PASCRELL. Well, I will stand corrected. If you would 
come back to me with that, I would appreciate that when you 
have time.
    Mr. IWRY. Certainly, Congressman.
    Mr. PASCRELL. One percent of the workers will still have 
the option of using the exchanges to purchase health care. I am 
not talking about the businesses. I am saying the total number 
of workers.
    According to a just-released Urban Institute study, 
repealing the individual mandate would cause the uninsurance 
rate, if I can use that term, to be a full 50 percent higher 
than it would be with full implementation of the law. Am I in 
the ballpark?
    Mr. IWRY. Congressman, be happy to review that study and 
give you our views.
    Mr. PASCRELL. Pretty startling if it is true. And I did not 
pick these numbers off the shelf. You go through the Labor 
Department with numbers and you start making divisions and 
multiplication, and that is what I come up with.
    Now, this is in addition, now. If that is true, and you are 
going to get back to us, 13.7 million people without insurance, 
an additional 13.7 million without insurance. I think making 
sure these 13.7 million Americans have health insurance on 
January 1st should be our focus here today and tomorrow and the 
next day. If the majority wants to discuss the plight of the 
individual, that is who we should be talking about.
    I yield back, Mr. Chairman.
    Chairman BRADY. Time is expired.
    Dr. Price.
    Mr. PRICE. Thank you, Mr. Chairman. And I want to just say 
to my friend from New Jersey who just spoke, what we are simply 
trying to do is to make certain that the healthcare system 
works for patients and doctors especially, because that is 
where all of us interact with the healthcare system, is when we 
become ill and have to go see our doctor.
    It is clear that the Administration and the Treasury 
Department now see that it does not work for employers. So what 
we are asking is, well, how about just plain folks? How about 
my neighbor? How about the couple that run the corner grocery 
store in my neighborhood? What about them?
    Mr. Gerlach asked you at the end of his time, have you 
heard from any individuals who have had concerns about the ACA 
and the implementation?
    Mr. IWRY. Congressman, we have had interaction with and 
comments from, certainly, organizations that represent 
individuals, and the Administration has----
    Mr. PRICE. Any just plain folks?
    Mr. IWRY. The Administration has heard from thousands and 
thousands of individuals about various provisions of the 
Affordable Care Act.
    Mr. PRICE. And their concern about the implementation 
thereof. Is that right?
    Mr. IWRY. Congressman, I think that the input from 
individuals has been on all sorts of aspects, and many of them, 
I believe, very supportive of the Affordable Care Act.
    Mr. PRICE. Many of them opposed as well, though, I would 
suspect. That is what we get in our office. Right?
    Mr. IWRY. I assume that the input from individuals has 
spanned the spectrum of views.
    Mr. PRICE. Absolutely. Absolutely. So if the Administration 
is saying, okay, we are going to listen to the employer--and 
God bless you for doing so. Thank you very much. We have been 
telling you this for 3\1/2\ years, or 3 years now--should we 
not listen to just plain folks?
    Is there not a rationale that could be made that if we are 
going to give this kind of year's relief for employers, for 
businesses, to comply with all of the machinations of this 
complex law, should we not give that same relief to just plain 
American people?
    Mr. IWRY. Congressman, my understanding is that, among 
other channels, that many individuals communicate with various 
parts of the Government--HHS, the White House, et cetera----
    Mr. PRICE. No. But the question is, should we not give that 
same relief, that same delay?
    Mr. IWRY [continuing]. And that much of what individuals 
are asking for is the protection from preexisting condition 
exclusions, the protection from being denied----
    Chairman BRADY. The Chairman clearly identified that a 
delay in the individual mandate would not exclusion that 
portion of the law. Is that not correct? Have you had any 
discussions at Treasury about the possibility of a delay of the 
individual mandate?
    Mr. IWRY. Mr. Price, I am not part of all the discussions 
at Treasury, of course.
    Mr. PRICE. Have you? Have you been involved in any 
discussions at Treasury and the IRS to consider a delay in the 
individual mandate?
    Mr. IWRY. Congressman, we have not.
    Mr. PRICE. Have you, Mr. Iwry, had any discussions at all 
about considering a delay in the individual mandate?
    Mr. IWRY. Congressman, I do not recall being part of any 
discussion that involved a view on our part, or my part, that 
there would be a necessity to provide more transition relative 
than Congress has already provided for individuals under the 
individual responsibility provisions, the transition relief 
that is phased in that provides a much lower level of penalty 
in 2014 and lower in 2015 with the----
    Mr. PRICE. But you were involved with the discussions about 
the delay in the employer mandate. Is that correct?
    Mr. IWRY. Congressman, very much involved in discussions 
about whether transition relief was needed with respect to the 
employer reporting and the broader employer responsibility 
requirements.
    Mr. PRICE. I have got just a few more seconds, and I 
appreciate that.
    Mr. IWRY. Yes.
    Mr. PRICE. The question is about this 95 percent of 
employers who employ more than 50 individuals currently cover 
their employees with health coverage. Five percent do not. Do 
you know how many that is? How many folks is that? How many 
employees in that 5 percent?
    Mr. IWRY. The 5 percent of employers who are over 50 that 
do not offer coverage currently?
    Mr. PRICE. Correct. Correct.
    Mr. IWRY. Be happy to get you that figure.
    Mr. PRICE. The thorough analysis that you all said you did, 
these are the individuals that are now thrown into the 
individual mandate. Right? These are the folks that now have to 
provide coverage for themselves. And I look forward to 
following up.
    Thank you, Mr. Chairman.
    Chairman BRADY. Thank you.
    Mr. Smith is recognized.
    Mr. SMITH. Thank you, Mr. Chairman. And thank you to Mr. 
Iwry for being here today to share your insight.
    Can you tell us what the first indicator was that you 
detected that would eventually lead to this delay in the 
employer mandate? Was it just the weighing in of business 
folks, or were there other indicators?
    Mr. IWRY. Mr. Smith, as I know you appreciate, we are in 
continual contact with stakeholders. And----
    Mr. SMITH. But more specifically, what would you say was an 
early indicator?
    Mr. IWRY. And for at least the last year or so, a number of 
major representatives of large portions of our economy, people 
such as the retail industry----
    Mr. SMITH. Okay. So it was concerns by the private sector 
that were raised that were the earliest indicators that perhaps 
this needed to see a delay?
    Mr. IWRY. Mr. Smith, I am not sure I would be comfortable 
in trying to reconstruct the earliest indicator. But clearly, a 
very prominent request, a very pronounced request for 
additional time has been coming--very publicly, not to Treasury 
in particular as opposed to anyone else--but to anyone who 
would listen, certainly to Congress and congressional testimony 
and in press releases and public statements from industry, that 
more time on the reporting systems issues to adapt their 
systems to the reporting rules, to collect information that 
they would need to collect more efficiently and at lower cost.
    Mr. SMITH. Right. So then on the reporting issue, are you 
saying that the Administration will not be efficient the 
reporting? Explain again how this can be done without Congress 
codifying the very desire for the 1-year delay?
    Mr. IWRY. Congressman, happy to do that. The announcement 
that we have made indicates that 1 additional year would be 
provided before the reporting requirements for the entities 
that are required to report, employers if they have coverage--
--
    Mr. SMITH. And so that is authorized in the law itself?
    Mr. IWRY. The law itself provides for the reporting 
requirements for insurers, employers----
    Mr. SMITH. But for the delay?
    Mr. IWRY. The delay is one that we have made pursuant--that 
the transition relief is something that we have provided 
pursuant to our authority under the Tax Code, Section 7805(a), 
to provide when necessary----
    Mr. SMITH. So did this authority exist before the passage 
of the Affordable Care Act?
    Mr. IWRY. Congressman, not only did the authority exist, 
but it has been exercised by administrations on both sides of 
the aisle on a variety of occasions to provide appropriate and 
necessary transition relief, not just to employers but to 
taxpayers generally, when the circumstances persuade the 
Treasury Department that additional time would be consistent 
with the furtherance of what Congress intended when it enacted 
the particular requirement at issue.
    Mr. SMITH. Okay. And now, shifting gears a bit, if an 
individual qualifies for a subsidy that is conditional upon 
employer provisions of health insurance, but there would be the 
delay for the employer provision. This was touched on earlier. 
Can we really effectively still mandate the individual 
situation when the employer mandate is not in place?
    Mr. IWRY. Congressman, the transition relief with respect 
to the employer responsibility does not at all make it 
impractical for individuals to be able to report----
    Mr. SMITH. But it is a condition upon which an individual 
would qualify for a subsidy. Is that correct?
    Mr. IWRY. If an individual wants to apply for a subsidy for 
a premium tax credit, there are a number of conditions that 
apply, including the individual's income, whether the 
individual actually has acquired coverage----
    Chairman BRADY. Yes. Time is expired. Thank you, sir.
    Mr. RANGEL. Thank you, Mr. Chairman.
    Thank you, Mr. Iwry. You seem to be hesitating in a lot of 
the responses from the questions that are being asked of you. 
And it is my observation it is because they sent the wrong 
person here to answer.
    You have indicated, and your record shows, that you are 
involved in policy, and this Committee needs someone that is 
involved in politics because there is no question that no one 
cares about what the policy is and no one cares whether the 
President delayed anything.
    Actually, most anything that the President wants, the 
majority party in the House, they do not want. If the President 
actually walked on water, I am certain that the Speaker's group 
would be saying that the President cannot swim and that we 
ought to take another look at him.
    Now, it is very unusual for me to remember any circumstance 
where a major piece of legislation is being opposed and 
suggested that it be repealed when they have a President, the 
sponsor of the legislation, in office. And so I do not think 
you have to be a politician to answer that.
    If the Republicans were to repeal the Affordable Care Act, 
does it appear that the President of the United States would 
veto it?
    Mr. IWRY. If the----
    Mr. RANGEL. If a repeal is passed by the House and Senate, 
which is almost politically impossible, in your opinion would 
not the President veto it?
    Mr. IWRY. My understanding, Mr. Rangel, is that that is 
certainly the case.
    Mr. RANGEL. And everybody in the House of Representatives 
and the Senate, they know this. And so obviously, they do not 
give a darn about your policy or the President's policy. It is 
here to embarrass the President or the Administration as it 
relates to doing what they want done. They not only want it 
delayed, they want it out. There will be bills on the floor to 
delay and to repeal other parts of the bill.
    My question, to put on your policy hat, is if their 
political goals and legislative goals were achieved, what would 
be in place to provide health care for Americans? What would be 
there?
    Mr. IWRY. Mr. Rangel, if this legislation were repealed----
    Mr. RANGEL. Wiped out.
    Mr. IWRY [continuing]. We would continue to see tens of 
millions of Americans, more than 50 million, without coverage, 
so many of whom would get coverage as a result of this act. We 
would continue to see insurance taken away from people because 
they have gotten sick or the pricing----
    Mr. RANGEL. Well, what about young people? Would they be 
able to get on their parents' insurance program up until 26? 
Would that be available to them if it was repealed?
    Mr. IWRY. It would not. It would not, Mr. Rangel.
    Mr. RANGEL. Okay. What about the prescription drugs 
discounts that are provided in this law for seniors? Would that 
be available if this was repealed?
    Mr. IWRY. No, sir.
    Mr. RANGEL. Okay. Now, what about these preventive 
services, not waiting until you get sick but to be able to see 
a doctor and to get medical advice and help before you get 
sick? Would that be available if we repeal ObamaCare?
    Mr. IWRY. It would not, and it would not be required to be 
provided at no cost.
    Mr. RANGEL. What about the lifetime? Is it possible that 
you could make insurance companies keep you insured for life, 
or could they continue, as they had in the past, to just cut 
you off?
    Mr. IWRY. That is another protection of the law that would 
not be in effect if the law were not in effect.
    Mr. RANGEL. And if you were applying for health insurance 
and they said, well, you have been sick before, we do not want 
to take you, if you wiped out ObamaCare, would they be forced 
to----
    Chairman BRADY. All time has expired.
    Mr. RANGEL. My time has expired. Send a politician down 
here next time, Mr. Iwry.
    Chairman BRADY. Mr. Iwry, thank you for your brief, clear, 
concise answers. I hope that will continue as we go in the 
hearing.
    Mr. Kelly.
    Mr. KELLY. I thank you, Chairman, and Mr. Iwry, thank you 
so much for being here. I was reading over your resume. It is 
really impressive. I mean, there is no question about you being 
an authority on this.
    So with that in mind--and you are also a graduate of the 
Harvard Law School, I am understanding. Let me ask you, because 
this is the crux of this whole problem. Where I am from, back 
home, people expect to be treated fair and equally under the 
law. The Patient Protection Affordable Care Act is a law. 
Correct? So I think there is a natural feeling that I should be 
treated fairly and equally under it.
    Now, the question then comes down to, what is the 
definition of fair? Now, I will tell you what. Fair is defined 
as, ``Marked by impartiality and honesty; free from self-
interest, prejudice, or favoritism.'' But back where I am from, 
you know what it means? You treat me the same way you treat 
somebody else. That is all it means. I think that is kind of--
you do not have to have a law degree to understand that.
    The other thing is equal. What does equal mean? ``It is of 
the same measure, quantity, amount, or a number as another. 
Like in quality or status.'' But I thought the part that was 
best is, ``Like for each member of a group, class, or 
society.''
    So now on July 2nd, there was a decision made and, 
according to your testimony, there was great deliberation over 
this. Is that true?
    Mr. IWRY. Congressman, there was very careful deliberation.
    Mr. KELLY. Okay. Listen. I have got to tell you. I am real 
simple. A yes or no is easy for me.
    So there was great deliberation. Yes? Was there also 
consideration of, if we do this with the employer mandate, what 
do we do with the individual mandate? Any discussion on that? 
And that is just a yes or no question.
    Mr. IWRY. Congressman, there was consideration----
    Mr. KELLY. Mr. Iwry, I am not trying to be a wise guy with 
you, but you do not to build me a watch. Please just tell me 
the time. Yes or no, was there a discussion on the individual 
mandate?
    Mr. IWRY. Congressman, as the employer responsibility 
provision transition relief was considered----
    Mr. KELLY. I am going to ask for more time. Was there a 
discussion on the individual mandate? Because you said there 
was quite a discussion on the employer mandate. My question to 
you: Was there a discussion on the individual mandate? It is 
yes or no, sir. It is a very easy question.
    Mr. IWRY. Congressman, the individual responsibility 
provision, how it would be affected and how it might interact 
if transition relief was given on the employer responsibility 
reporting provisions and the other employer requirements, 
consideration of the potential impact----
    Mr. KELLY. Consideration. So there was discussion?
    Mr. IWRY [continuing]. Was certainly----
    Mr. KELLY. There was discussion?
    Mr. IWRY [continuing]. Was certainly given.
    Mr. KELLY. All right. There was discussion on it. Now, I do 
not want to be disrespectful, but I only have a little bit of 
time, and I need you to answer the questions as I ask. These 
are all yes or noes, really.
    My question do you is, do you know what a deadline is? I 
looked these things up. I am concerned about this because I 
have never seen an organization that pays less attention to 
deadlines than this organization. Deadlines really are not 
deadlines, not in the government sector. Now, the private 
sector, if there is a deadline, by golly, you are held to that 
deadline, and if not you are held responsible and accountable 
for not meeting it.
    But here, you know what? We will pick and choose what we 
want to do. We will figure out what is fair and equal depending 
on what we want to do. A deadline is: ``A date or time before 
which something must be done.'' Okay. The deadlines were all 
established under the law. Go back to March 23, 2010. That is 
when we started working this. My goodness, it is over 3\1/3\ 
years, and we are still trying to figure this out.
    Now, I have got to tell you. I am an employer. And you just 
sit there and I keep hearing about, well, you do not 
understand. For big people, it did not matter. Well, a lot of 
big people got waivers on it.
    I am just tired of getting jerked around from being out in 
the public sector, and I am tired of hearing all these 
different excuses of why it could not be done. This is 
absolutely pathetic, that we have to stand here and have this 
type of a conversation when the answers are all yes and no 
answers, and the truth of the matter is we keep hearing the 
overwhelming support.
    My friends keep saying, but you know what? We should delay 
this. We have to take our time. My goodness, we do not want to 
rush this through. Is it not a shame they did not use that same 
philosophy back in 2010? Would it not have been a little bit 
easier?
    I have got to tell you that I have great respect for 
Treasury. I know you have 115,000 people that work there, and 
you guys go through $14 billion of taxpayer money every year to 
run that. But I expect a little better performance, and I 
expect a little better return on the investment by the American 
taxpayers. This is unraveling before our very eyes.
    So I would just ask you: You have said that you guys 
studied it, that you talked about it. There was intense--maybe 
not intense, but there was a lot of discussion on it. July 2nd 
it comes out. Boom, we put it on a blog. We cannot even tell 
the American people the right way. We wait until Friday 
afternoon, which is the way everything comes out of this 
Administration. And then we drop this bomb on them.
    So the individual mandate has to be kept in there. It 
cannot be considered. Even though we did it for the employer 
mandate, we cannot do it for the individual. Yes or no?
    Chairman BRADY. Time has expired.
    Mr. Reed.
    Mr. KELLY. All right. Good deal.
    Mr. REED. Thank you, Mr. Chairman. And thank you for the 
testimony today, sir.
    I share the concern about this decision of the 
Administration for the employer mandate. But what I would like 
to do in our exchange here today is to clearly get an 
understanding from Treasury's perspective and for my 
constituents as to what you did over the last 3\1/2\ years 
since the enactment of this law in March 2010.
    What are your concrete steps going forward as to what 
Treasury needs to do, will do, and that we can hold you 
accountable to so that 12 months from now or as we come up on 
the 2015 deadline, we are not faced with another last-minute 
announcement through an internet blog saying, well, you know, 
we are not ready again.
    So the question I have for you, sir, is what did Treasury 
do? You knew this employer mandate was coming the last 3\1/2\ 
years. What did you do to prepare for that? Where did you fail? 
Because clearly you failed because you did not meet the 
deadline. And what are you going to do over the next 12 months, 
in detail, to make sure that we do not have another delay going 
forward?
    So let's start with, what did you do? What did you 
organizationally do?
    Mr. IWRY. So, Congressman, what Treasury did, has done, 
with respect to the employer responsibility part of the 
Affordable Care Act includes an extensive set of guidance that 
involved five rounds of interaction, through written comments, 
with the private sector and the whole stakeholder community.
    Mr. REED. So those guidance are documents you prepared 
based on input to say what to the employers?
    Mr. IWRY. We have issued proposed regulations in December 
of 2012 that told taxpayers they could rely on the rules in 
those proposed regulations for implementations----
    Mr. REED. So it took 2 years. So it took 2 years to get 
those proposed rules ready to go. So where do we stand today on 
those rules, and where are we going over the next 12 months?
    Mr. IWRY. So, Congressman, those proposed rules tell 
taxpayers that they can rely on those rules for implementation 
in 2014; that the rules embody the results of the intense 
dialogue with plan sponsors and stakeholders in all parts of 
the economy----
    Mr. REED. So if those rules are all done, why do you need 
any delay?
    Mr. IWRY. The----
    Mr. REED. That is what I am hearing. You are telling me 
that the rules are done, and you have given guidance to the 
industry and to employers. And then you comment the same breath 
and say, we need a delay. That does not make sense to me. 
Explain to me why I am wrong.
    Mr. IWRY. Congressman, I am happy to explain. The employer 
responsibility proposed rules relate to most aspects of 
employer responsibility under the law. Employers asked us to 
give priority to those particular rules, to do that first, in 
our discussions with them when we asked them, what is most 
important? What is the critical path?
    The reporting requirements are not part of that proposed 
regulation. The employer----
    Mr. REED. So you are going to do the reporting requirements 
as part of that proposal because it was too complicated for you 
to deal with the reporting requirements, or because the 
employers said, well, we just want you to focus there first 
rather than on the reporting requirements? Is that what your 
testimony is?
    Mr. IWRY. Congressman, employers told us that of the very 
significant different portions of this legislation that need to 
be digested and implemented and worked out in regulations. The 
employer reporting requirements were generally something that 
they thought we should do not as the first priority or the 
first step, but rather as a second step after the main body of 
employer responsibility requirements.
    Mr. REED. Okay. My time is running short. So now going 
forward, what are you going to do over the next 12 months that 
I can hold you accountable to next time you come up here and 
ask for a delay?
    Mr. IWRY. Congressman, we are moving forward now to take 
advantage of the feedback we have received from plan sponsors 
and other stakeholders on the reporting requirements in the 
form of written comments, which we have asked for and gotten. 
And we are now moving to prepare proposed regulations on those.
    Chairman BRADY. All time has expired.
    Mr. Crowley.
    Mr. CROWLEY. Thank you, Mr. Chairman. Thank you for 
allowing me to participate. I am not a Member of the 
Subcommittee, and I appreciate the opportunity. Mr. Iwry, thank 
you for your testimony today.
    While I know this hearing is focused on the employer 
responsibility requirement, I want to point out something about 
the individual responsibility requirement as well. Today's New 
York Times, as I know my colleague from Wisconsin, Mr. Kind, 
mentioned earlier, highlights that in New York's marketplace, 
individual policies are expected to see a rate drop of 50 
percent or greater.
    That is a huge success of the Affordable Care Act, or 
ObamaCare, because the major thing that has changed in New 
York's market is the addition of all those healthy people into 
these plans. This is a tangible success, and proof that all the 
doom and gloom of my colleagues on the other side is not likely 
to come to pass.
    I believe that most employers will continue to offer health 
insurance coverage. My Republican colleagues want to use the 
ACA as a scapegoat for business decisions that may well be 
happening irrespective of health reform. But I am confident 
that the overwhelming majority of businesses who offer coverage 
today without any requirements will continue to do so.
    Mr. Iwry, are there not a number of surveys suggesting that 
employers will continue to offer coverage?
    Mr. IWRY. Mr. Crowley, we do think that there is a good 
reason to believe that employers that have been offering 
coverage will indeed continue to offer coverage in 2014, that 
employers will not drop coverage in 2014 simply because of the 
1-year transition relief with respect to the employer reporting 
and because of the employer reporting with respect to the 
employer responsibility.
    Mr. CROWLEY. And it is not just your belief, I want to 
point 
out for the record. A survey by the International Foundation of 
Employee Benefit Plans found that most employers, 99 percent of 
employers, will continue to offer coverage. Is that not true or 
correct?
    Mr. IWRY. Congressman, I do not have that survey in front 
of me. But be happy to review it and get back to you on that. 
But that is consistent in general with our expectation that 
employers will continue to provide coverage.
    Mr. CROWLEY. Thank you, Mr. Iwry. Clearly, employers view 
providing health insurance as good for business and will 
continue to do so. In a recent survey, over two-thirds of 
employers said they value offering health insurance because it 
helps them retain current employees as well as attract future 
employees.
    Having healthy employees is also important for reduced 
absenteeism and increased productivity, which I know my 
Republican colleagues would all support. So I thank you, Mr. 
Iwry, for your testimony today. If you have anything more to 
add, I would yield you time, if you have more additional 
information you want to provide.
    Mr. IWRY. Mr. Crowley, I would add I think it is important 
to note that another reason that employers have been providing 
health coverage to such a great extent, and another reason to 
expect employers to continue doing so in 2014 as they look to 
the 1/1/2015 implementation date for the employer 
responsibility provisions, is the very considerable tax 
advantages associated with employer-sponsored health coverage, 
that is, the employee's ability to not recognize income on the 
value of the employer coverage provided to the employee, the 
income tax exclusion, the payroll tax exclusion, and the 
employer's payroll tax exclusion for the employer-sponsored 
health coverage.
    Those advantages have continued and will continue 
throughout to make it particularly advantageous for employers 
to provide coverage, in addition to the factors that you 
mentioned.
    Mr. CROWLEY. Thank you, Mr. Iwry.
    And Mr. Chairman, once again thank you for allowing me to 
participate in the Subcommittee hearing. Thank you. I yield 
back the balance.
    Chairman BRADY. You bet. Thank you.
    Dr. Boustany.
    Mr. BOUSTANY. Thank you, Mr. Chairman. And Mr. Iwry, thank 
you for being here today.
    You are widely acknowledged as a preeminent employee 
benefits lawyer in this country, and I know you have spent 3-
plus years working on the regulations attendant upon the 
statute dealing with the employer mandate.
    You, the Administration, now have acknowledged it is not 
ready, not ready for prime time. Clearly, it is complicated. 
You have a talented team around you. You are one of the 
preeminent lawyers in this area. And yet there is an admission 
it is not ready.
    You have met with industries, various stakeholders, and all 
of this, as have we. We have heard lots of testimony on this. 
And so I just want to run through a couple of industry sectors 
and get your opinion, basically a yes or no.
    Do you think that the employer mandate statute would have a 
particularly large impact on employment practices for the 
franchise industry, franchisees? I mean, we have seen a lot of 
reports and various articles about this.
    Mr. IWRY. Congressman, you are asking whether we think that 
the employer requirements----
    Mr. BOUSTANY. Yes.
    Mr. IWRY [continuing]. Would have an impact on----
    Mr. BOUSTANY. Their employment practices, their hiring. 
Will it affect the franchise owners? Will it affect 
restaurants, individually-owned restaurants? What about 
retailers? Grocers? Small businesses?
    Mr. IWRY. Right. All of the franchise operations and small 
businesses, restaurants and so forth, that have fewer than 50 
employees, as defined in this legislation, would be completely 
unaffected.
    Mr. BOUSTANY. No. I understand that. But what about those 
right at that mark? What about those that are just above? Do 
you acknowledge that many of them are shifting to part-time 
employees to try to work with this statute as it is 
implemented?
    Mr. IWRY. Congressman, I do not think we have seen evidence 
yet that a lot of these employers are in fact shifting. Clearly 
there has been conversation about whether they would, to what 
extent.
    Mr. BOUSTANY. We are seeing it in our congressional 
districts. I mean, we are hearing it directly from employers 
who are making those kinds of changes. And so I guess I would 
follow up with this. We have slow growth. Record unemployment. 
People are not looking for work. People are out of work, 
particularly in the younger demographic.
    What does a 1-year delay do on this when you have 
acknowledged it is very complex, you have been at it over 3 
years, and you have not come up with the final package on how 
this is implemented? Health care is complicated enough, and yet 
now we are putting this additional, very complex set of 
regulations, potentially, on these business owners in a very 
sluggish economy.
    What is 1 year going to get us? What kind of certainty will 
that provide for these business owners?
    Mr. IWRY. Congressman, we have been in very close touch 
with business owners--small business, large business. We have 
had many, many conversations at the nuts and bolts level about 
how this law would potentially affect them and about what we 
can do to make it more workable, as workable as possible for 
them, and as easy as possible for them to work with and help 
their employees get coverage.
    What we have done as a result of all that is to actually be 
ready. We have put out employer responsibility rules and 
employers----
    Mr. BOUSTANY. But you are not ready because you have asked 
for a 1-year delay on this. We are trying to understand, what 
does a 1-year delay get us after 3 years of very hard work 
trying to put this in place? To me, it is an admission that we 
have something that is far too complex and probably should be 
repealed.
    Mr. IWRY. Congressman, the 1-year delay is in response to 
the employer requests for more time for them to adapt their 
systems of information reporting and for us, if we can, to find 
a way to simplify or streamline that particular aspect of the 
employer requirements, if we can find more ways to make it 
easier and more cost-effective for employers that are already 
providing coverage to their employees.
    Mr. BOUSTANY. That is a very big ``if.'' That is a very big 
``if.''
    Mr. IWRY. Congressman, we have had a good experience 
working with employers and finding creative ways to make the 
other employer requirements more workable. We hope to do the 
same, if we can, with respect to reporting.
    Chairman BRADY. All time has expired.
    The topic of this hearing was the delay in the employer 
mandate and the fairness and equality of treating workers 
differently than the treatment of businesses. I want to thank 
you, Mr. Iwry, for being here today.
    Since you were not informed of the key elements of the 
timetable earlier in testimony, you agreed you would provide 
promptly in writing to the Committee when the Treasury 
Department made the final decision on the employer mandate, 
when they informed the White House of this decision, when they 
informed the HHS, and the answer to the question of, were any 
Members of Congress or the staff notified of this decision 
ahead of the blog post.
    I would encourage you to provide that promptly within the 
week, a week, to this Committee. Agreed?
    Mr. IWRY. Mr. Chairman, we will certainly be happy to 
respond to your request. I cannot speak for the whole 
Department in terms of the exact timing for details, but we 
will be happy to work with your staff and cooperate.
    Chairman BRADY. We figured that out with--thank you.
    As a reminder, any Member wishing to submit a question for 
the record will have 14 days to do so. If any questions are 
submitted to Mr. Iwry, we ask the witness to respond in a 
timely manner.
    With that, the Subcommittee is adjourned.
    [Whereupon, at 11:54 a.m., the Subcommittee was adjourned.]

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