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21–103 2016

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 

KEVIN BRADY, Texas 

PAUL RYAN, Wisconsin 

DEVIN NUNES, California 

PATRICK J. TIBERI, Ohio 

DAVID G. REICHERT, Washington 

CHARLES W. BOUSTANY, JR., Louisiana 

PETER J. ROSKAM, Illinois 

JIM GERLACH, Pennsylvania 

TOM PRICE, Georgia 

VERN BUCHANAN, Florida 

ADRIAN SMITH, Nebraska 

AARON SCHOCK, Illinois 

LYNN JENKINS, Kansas 

ERIK PAULSEN, Minnesota 

KENNY MARCHANT, Texas 

DIANE BLACK, Tennessee 

TOM REED, New York 

TODD YOUNG, Indiana 

MIKE KELLY, Pennsylvania 

TIM GRIFFIN, Arkansas 

JIM RENACCI, Ohio 

SANDER M. LEVIN, Michigan 

CHARLES B. RANGEL, New York 

JIM MCDERMOTT, Washington 

JOHN LEWIS, Georgia 

RICHARD E. NEAL, Massachusetts 

XAVIER BECERRA, California 

LLOYD DOGGETT, Texas 

MIKE THOMPSON, California 

JOHN B. LARSON, Connecticut 

EARL BLUMENAUER, Oregon 

RON KIND, Wisconsin 

BILL PASCRELL, JR., New Jersey 

JOSEPH CROWLEY, New York 

ALLYSON SCHWARTZ, Pennsylvania 

DANNY DAVIS, Illinois 

LINDA SA ́ NCHEZ, California 

JENNIFER M. SAFAVIAN, Staff Director and General Counsel 

JANICE MAYS, Minority Chief Counsel 

SUBCOMMITTEE ON HEALTH 

KEVIN BRADY, Texas, Chairman 

SAM JOHNSON, Texas 

PAUL RYAN, Wisconsin 

DEVIN NUNES, California 

PETER J. ROSKAM, Illinois 

JIM GERLACH, Pennsylvania 

TOM PRICE, Georgia 

VERN BUCHANAN, Florida 

ADRIAN SMITH, Nebraska 

JIM MCDERMOTT, Washington 

MIKE THOMPSON, California 

RON KIND, Wisconsin 

EARL BLUMENAUER, Oregon 

BILL PASCRELL, JR., New Jersey 


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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 Secretary for Retirement and Health Policy, U.S. Department of the Treasury ... 7 


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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:] 


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ADVISORY 

FROM THE COMMITTEE ON WAYS AND MEANS 

SUBCOMMITTEE ON HEALTH 

FOR IMMEDIATE RELEASE CONTACT: (202) 225–3625 

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. 


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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 Committee by a witness, any supplementary materials submitted for the printed record, and any written comments in response 

to a request for 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 referenced and quoted or paraphrased. All exhibit material 

not meeting these specifications will be maintained in the Committee files for review and use 

by the Committee. 

3. All submissions must include a list of all clients, persons and/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 business days notice is requested). 

Questions with regard to special accommodation needs in general (including availability of Committee 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

f 

/. 

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. 


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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 


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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. 


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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. 


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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 


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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:] 


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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. 


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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? 


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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 


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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 


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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—— 


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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. 


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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. 


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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. 


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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. 


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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. 


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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:] 


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Mr. KIND. In that article, it states ‘‘Beginning in October, indi- viduals 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:] 


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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. 


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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 


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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:] 


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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 

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vision, 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 


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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. 


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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? 


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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 31⁄2 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? 


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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? 


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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 

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barrass 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. 


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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 


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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 31⁄3 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 

31⁄2 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 31⁄2 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 


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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? 


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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 


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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 employersponsored 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 


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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 costeffective 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 


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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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