[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
PATIENT PROTECTION AND AFFORDABLE CARE ACT: IMPLEMENTATION IN THE WAKE
OF
ADMINISTRATIVE DELAY
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS
OF THE
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
FIRST SESSION
__________
JULY 18, 2013
__________
Serial No. 113-72
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Printed for the use of the Committee on Energy and Commerce
energycommerce.house.gov
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COMMITTEE ON ENERGY AND COMMERCE
FRED UPTON, Michigan
Chairman
RALPH M. HALL, Texas HENRY A. WAXMAN, California
JOE BARTON, Texas Ranking Member
Chairman Emeritus JOHN D. DINGELL, Michigan
ED WHITFIELD, Kentucky Chairman Emeritus
JOHN SHIMKUS, Illinois EDWARD J. MARKEY, Massachusetts
JOSEPH R. PITTS, Pennsylvania FRANK PALLONE, Jr., New Jersey
GREG WALDEN, Oregon BOBBY L. RUSH, Illinois
LEE TERRY, Nebraska ANNA G. ESHOO, California
MIKE ROGERS, Michigan ELIOT L. ENGEL, New York
TIM MURPHY, Pennsylvania GENE GREEN, Texas
MICHAEL C. BURGESS, Texas DIANA DeGETTE, Colorado
MARSHA BLACKBURN, Tennessee LOIS CAPPS, California
Vice Chairman MICHAEL F. DOYLE, Pennsylvania
PHIL GINGREY, Georgia JANICE D. SCHAKOWSKY, Illinois
STEVE SCALISE, Louisiana JIM MATHESON, Utah
ROBERT E. LATTA, Ohio G.K. BUTTERFIELD, North Carolina
CATHY McMORRIS RODGERS, Washington JOHN BARROW, Georgia
GREGG HARPER, Mississippi DORIS O. MATSUI, California
LEONARD LANCE, New Jersey DONNA M. CHRISTENSEN, Virgin
BILL CASSIDY, Louisiana Islands
BRETT GUTHRIE, Kentucky KATHY CASTOR, Florida
PETE OLSON, Texas JOHN P. SARBANES, Maryland
DAVID B. McKINLEY, West Virginia JERRY McNERNEY, California
CORY GARDNER, Colorado BRUCE L. BRALEY, Iowa
MIKE POMPEO, Kansas PETER WELCH, Vermont
ADAM KINZINGER, Illinois BEN RAY LUJAN, New Mexico
H. MORGAN GRIFFITH, Virginia PAUL TONKO, New York
GUS M. BILIRAKIS, Florida
BILL JOHNSON, Missouri
BILLY LONG, Missouri
RENEE L. ELLMERS, North Carolina
Subcommittee on Oversight and Investigations
TIM MURPHY, Pennsylvania
Chairman
MICHAEL C. BURGESS, Texas DIANA DeGETTE, Colorado
Vice Chairman Ranking Member
MARSHA BLACKBURN, Tennessee BRUCE L. BRALEY, Iowa
PHIL GINGREY, Georgia BEN RAY LUJAN, New Mexico
STEVE SCALISE, Louisiana EDWARD J. MARKEY, Massachusetts
GREGG HARPER, Mississippi JANICE D. SCHAKOWSKY, Illinois
PETE OLSON, Texas G.K. BUTTERFIELD, North Carolina
CORY GARDNER, Colorado KATHY CASTOR, Florida
H. MORGAN GRIFFITH, Virginia PETER WELCH, Vermont
BILL JOHNSON, Ohio PAUL TONKO, New York
BILLY LONG, Missouri GENE GREEN, Texas
RENEE L. ELLMERS, North Carolina JOHN D. DINGELL, Michigan
JOE BARTON, Texas HENRY A. WAXMAN, California (ex
FRED UPTON, Michigan (ex officio) officio)
C O N T E N T S
----------
Page
Hon. Tim Murphy, a Representative in Congress from the
Commonwealth of Pennsylvania, opening statement................ 1
Prepared statement........................................... 3
Hon. Diana DeGette, a Representative in Congress from the state
of Colorado, opening statement................................. 4
Hon. Fred Upton, a Representative in Congress from the state of
Michigan, opening statement.................................... 6
Prepared statement........................................... 7
Hon. Michael C. Burgess, a Representative in Congress from the
State of Texas, prepared statement............................. 8
Hon. Henry A. Waxman, a Representative in Congress from the State
of California, opening statement............................... 9
Hon. Gregg Harper, a Representative in Congress from the State of
Mississippi, opening statement................................. 54
Witnesses
J. Mark Iwry, Senior Advisor to the Secretary, Deputy Assistant
Secretary for Retirement and Health Policy, U.S. Department of
Treasury....................................................... 11
Prepared statement........................................... 14
Answers to submitted questions............................... 101
Submitted Material
Report, Majority staff, submitted by Mr. Murphy.................. 55
Report, Urban Institute Analysis, submitted by Ms. DeGette....... 58
Report, Democratic Staff of Committees on Energy and Commerce,
Ways and Means, and Education and the Workforce, submitted by
Mr. Waxman..................................................... 64
Report, Department of Health and Human Services, submitted by Mr.
Waxman......................................................... 89
PATIENT PROTECTION AND AFFORDABLE CARE ACT: IMPLEMENTATION IN THE WAKE
OF ADMINISTRATIVE DELAY
----------
THURSDAY, JULY 18, 2013
House of Representatives,
Subcommittee on Oversight and Investigations,
Committee on Energy and Commerce,
Washington, DC.
The subcommittee met, pursuant to call, at 2:34 p.m., in
room 2123 of the Rayburn House Office Building, Hon. Tim Murphy
(chairman of the subcommittee) presiding.
Members present: Representatives Murphy, Burgess,
Blackburn, Gingrey, Scalise, Harper, Olson, Gardner, Griffith,
Johnson, Long, Ellmers, Barton, Upton (ex officio), DeGette,
Schakowsky, Butterfield, Castor, Tonko, Green, and Waxman (ex
officio).
Staff present: Mike Bloomquist, General Counsel; Sean
Bonyun, Communications Director; Matt Bravo, Professional Staff
Member; Karen Christian, Chief Counsel, Oversight; Noelle
Clemente, Press Secretary; Andy Duberstein, Deputy Press
Secretary; Paul Edattel, Professional Staff Member, Health;
Julie Goon, Health Policy Advisor; Brad Grantz, Policy
Coordinator, Oversight and Investigations; Sydne Harwick,
Legislative Clerk; Brittany Havens, Legislative Clerk; Sean
Hayes, Counsel, Oversight and Investigations; Andrew Powaleny,
Deputy Press Secretary; John Stone, Counsel, Oversight; Tom
Wilbur, Digital Media Advisor; Brian Cohen, Democratic
Subcommittee Staff Director, Senior Policy Advisor; Hanna
Green, Democratic Staff Assistant; Elizabeth Letter, Democratic
Assistant Press Secretary; Stephen Salsbury, Democratic Special
Assistant; and Matthew Siegler, Democratic Counsel.
OPENING STATEMENT OF HON. TIM MURPHY, A REPRESENTATIVE IN
CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA
Mr. Murphy. Good afternoon. I convene this hearing of the
Subcommittee on Oversight and Investigations.
We are here today to discuss the Administration's recent
decision to delay a substantial portion of the health care law,
the requirement that businesses with over 50 employees provide
coverage to their employees. This decision was announced
quietly, just before the July 4 holiday, through a blog post.
Valerie Jarrett, one of the President's top advisors,
stated that the Administration had delayed the employer mandate
tax because it was ``listening'' to employers who had
complained about the law's burdens and costs.
In the 3 years since the President's health care law was
enacted, this committee has also been listening and we have
heard this Administration repeatedly tell us that ``all is
well.'' The exchanges would be ready to go live in October.
Never once did the Administration officials suggest that a key
underpinning of the law, the requirement that employers report
offer federally-approved health benefits and pay extra taxes if
they didn't, would be delayed.
As soon as the Treasury Department announced this decision
in a blog post, the committee sent a letter asking for some
basic information to understand how and why this decision was
made. The Executive Branch, the President, has a constitutional
duty to faithfully execute laws passed by Congress.
Both the Treasury Department and White House have said the
decision to delay the employer mandate was made after engaging
in a discussion with employers. Yet, in a July 9 letter to our
committee, the Treasury Department did not answer the
committee's questions about who they spoke with to reach this
decision. Why did the Administration give businesses a waiver
from the law for a full year, but force families to comply with
the law now or pay a new tax? Where is the waiver for America's
families?
This delay in the employer mandate tax is not the first
clue that implementation of the Affordable Care Act is becoming
a massive failure. In April 2011, more than 1,400 organizations
and employers providing health insurance to 3.1 million
Americans were granted waivers from the ACA's mandates for one
year. By January 2012, those 1,400 waivers were automatically
extended for 2 more years, and now, every employer in America
gets a waiver from the employer mandate tax. The American
people, however, get no waivers from the mandates, the taxes,
and burdens of this law.
It is interesting that the Treasury Department chose to
explain that the employer mandate was delayed for two reasons:
First, it will allow the Administration to find ways to
simplify the reporting requirements in the law. Second, this
provides time to adapt reporting systems. These same reasons
support a delay for the individual mandate.
Treasury's position that a delay is necessary because
additional time is needed to adapt reporting systems sends a
troubling signal about how the Administration's lack of
progress is affecting implementation of the law. How the
exchanges will operate next year appears now to be a far cry
from what the law envisioned. It also raises questions about
another recent delay by the Administration, also announced over
the July 4 holiday: Health and Human Services' decision to
scrap the income and coverage verification requirements for
2014.
I am sure today we will also hear a great deal about the
news that New York's premiums may be lower. This isn't
surprising: New York has the most heavily regulated and often
the most expensive health care market in the country, so of
course when you force every American to buy that expensive
product, the cost may go down. I certainly am not going to be
heading home to my district and saying congratulations, you now
get to pay Manhattan prices in Pennsylvania.
Enrollment in the exchanges will begin in just over 70
days. It is important that every American understands how this
system will work. So testifying before the committee today is
J. Mark Iwry, Senior Advisor to the Secretary and Deputy
Assistant Secretary for Retirement and Health Policy at the
U.S. Department of the Treasury. So I welcome you, Mr. Iwry,
and I hope that you can provide specific answers to the
committee members' questions about Treasury's decision and
whether we can expect additional delays.
Now yesterday the House of Representatives voted to do two
things. First, the House voted to codify the President's
ability to delay the employer mandate, and second, it voted to
offer this same option, the one given to America's businesses,
to American families. Whether or not you agree on this policy,
as an oversight subcommittee, we need to understand the basis
for the Administration's decisions to delay or postpone the
Act's requirements. As reports mount that the exchanges and
states are not prepared to fully implement this law, it seems
likely that the Administration will again find itself in the
position of wanting to grant additional delays of the law's
requirements. Examining the basis for these decisions, and how
they will be made, is the job of this subcommittee, and that is
the reason for having this hearing today.
I only have a few seconds left, but I yield to the vice
chairman, if he has any----
[The prepared statement of Mr. Murphy follows:]
Prepared statement of Hon. Tim Murphy
We are here today to discuss the administration's recent
decision to delay a substantial portion of the healthcare law--
the requirement that businesses with over 50 employees provide
coverage to their employees. This decision was announced
quietly, just before the July 4th holiday, through a blog post.
Valerie Jarrett, one of the president's top advisors, stated
that the administration had delayed the employer mandate tax
because it was ``listening'' to employers who had complained
about the law's burdens and costs.
In the three years since the president's health care law
was enacted, this committee has also been listening and we've
heard this administration repeatedly tell us that ``all is
well.'' That exchanges would be ready to go live in October.
Never once did administration officials suggest that a key
underpinning of the law--the requirement that employers report
offer federally-approved health benefits and pay extra taxes if
they didn't--would be delayed.
As soon as the Treasury Department announced this decision
in a blog post, the committee sent a letter asking for some
basic information to understand how and why this decision was
made. The executive branch--the president--has a constitutional
duty to faithfully execute laws passed by Congress.
Both the Treasury Department and White House have said the
decision to delay the employer mandate was made after engaging
in a discussion with employers. Yet, in a July 9th letter to
our committee, the Treasury department did not answer the
committee's question about who officials spoke with to reach
this decision. Why did the administration give businesses a
waiver from the law for a full year, but force individual
Americans to comply with the law NOW or pay a new tax?
Where is the waiver for the American people?
This delay in the employer mandate tax is not the first
clue that implementation of the Affordable Care Act is becoming
a massive failure.
In April 2011, more than 1,400 organizations and employers
providing health insurance to 3.1 million Americans were
granted waivers from the ACA's mandates for one year.
By January 2012, those 1,400 waivers were automatically
extended for two more years.
And now, every employer in America gets a waiver from the
employer mandate tax.
The American people, however, get no waiver from the
mandates, the taxes, and burdens of this law.
It is interesting that the Treasury Department chose to
explain that the employer mandate was delayed for two reasons:
First, it will allow the administration to find ways to
simplify the reporting requirements in the law. Second, this
provides time to adapt reporting systems. These same reasons
support a delay in the individual mandate.
Treasury's position that a delay is necessary because
additional time is needed to adapt reporting systems sends a
troubling signal about the administration's lack of progress in
implementing the law. How the exchanges will operate next year
appears now to be a far cry from what the law envisioned. It
also raises questions about another recent delay by the
administration, also announced over the July 4 holiday: HHS'
decision to scrap the income and coverage verification
requirements for 2014.
I'm sure today we will also hear a great deal about the
news that New York's premiums may be lower. This isn't
surprising: New York has the most heavily regulated and often
most expensive health care market in the country, so of course
when you force every American to buy that expensive product,
the cost may go down. I certainly am not going to be heading
home to my district and saying: ``Congratulations, you now get
to pay Manhattan prices in Pennsylvania.''
Enrollment in the exchanges will begin in just over 70
days. It is important that every American understands how this
system will work. Testifying before the committee today is J.
Mark Iwry, Senior Advisor to the Secretary and Deputy Assistant
Secretary for Retirement and Health Policy at the U.S.
Department of the Treasury. Welcome, Mr. Iwry. I hope that you
can provide specific answers to the committee members'
questions about Treasury's decision and whether we can expect
additional delays.
Yesterday the House of Representatives voted to do two
things. First, the House voted to codify the President's
ability to delay the employer mandate, and second, it voted to
offer this same option--the one given to America's businesses--
to American families. Whether or not you agree on this policy,
as an oversight subcommittee, we need to understand the basis
for the administration's decisions to delay or postpone the
Act's requirements. As reports mount that the exchanges and
states are not prepared to fully implement this law, it seems
likely that the administration will again find itself in the
position of wanting to grant additional delays of the law's
requirements. Examining the basis for these decisions, and how
they were made, is the job of this subcommittee. That is the
reason for having this hearing today.
# # #
Mr. Burgess. I will submit them.
Mr. Murphy. He will submit them for the record.
All right, I now recognize the ranking member for 5
minutes.
OPENING STATEMENT OF HON. DIANA DEGETTE, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF COLORADO
Ms. DeGette. Thank you very much, Mr. Chairman.
I am very pleased that we have started having oversight
hearings on the implementation of the Affordable Care Act. I
think it is an important role for the committee to play, and I
also think as we go forward, it would be really constructive
for us to begin having hearings on not just overall should we
have the ACA or not, but rather, to drill down into some of the
particular issues like we did a couple of weeks ago, when we
did have small businesses come in here to this committee to
talk to us about some of the challenges that they were facing.
I wish, though, that we were pursuing some of this
oversight in a less hyperbolic fashion, as we just heard.
Frankly, when the Administration announced a couple of weeks
ago that they were delaying the employer mandate, it took many
of us on this side of the Aisle by surprise, as well as on your
side of the Aisle. But frankly, thinking about that panel of
small businesspeople that we had here, one might argue that the
Administration was just listening to some businesses about some
very real issues that they had. Not that I would expect anybody
on your side of the Aisle to give the Administration any credit
for that.
I do think, though, that we should put all of this into
context, because while this one particular part of the law has
been delayed for a year, there is a lot more that is going to
be going on in implementation and a lot that will help the
American public. I would like to talk a little bit about that.
First of all, the delay of the employer mandate does not
impact the 95 percent of large employers that are already
offering insurance to their employees. Let me say that again.
Ninety-five percent of large employers are already offering
coverage to their employees, and that will continue to happen.
Also, the delay of the employer mandate does not impact the
millions of low income, uninsured Americans who will be newly
eligible for the Medicaid program, at least in the states where
the governors have not turned down the opportunity to provide
fully funded coverage to their citizens. And the delay won't
impact the state or federal exchanges, the heart of the health
care law. Beginning in October, millions of Americans will be
able to go to the exchanges, shop for the best insurance
coverage for themselves and their family in a transparent,
competitive market, and be protected from the worst abuses of
the insurance industry. They won't have to worry about
rescissions or denial of coverage if they become ill or
injured, or if they have a preexisting condition.
And this is really key when you talk about should we delay
this for a year for individuals. Those people, people who want
insurance who can now go to the exchanges and get that
insurance, will be eligible for billions of dollars in premium
subsidies and tax credits to help make that health insurance
affordable. So I would say, why would we delay that for people
who really want to get affordable insurance, not just in New
York, but in Pennsylvania and Colorado and all around this
country?
The benefits of the law will be real and significant. The
reports released by the democratic staff show yesterday that in
Colorado, for example--or I am sorry, in my district, in the
1st District of Colorado, over 120,000 people who don't have
health insurance now will have access to quality, affordable
coverage without fear of discrimination or higher rates. And if
it wasn't so important, I would have almost had to laugh
yesterday when the response to the Administration's
announcement was to vote yet again to repeal the Affordable
Care Act. The main talking point seemed to be relief, but in
fact, the public needs to get insurance and it needs to get it
affordable. I don't think that relief means taking health care
coverage away from millions of Americans. I don't think that it
means eliminating billions of dollars in tax credits and
subsidies. I don't think that it means leaving millions of
American children and adults with preexisting conditions at the
tender mercies of the insurance companies. And I don't think
that it means eliminating or delaying provisions of the law
that are helping to keep costs under control.
Now, you can pooh-pooh this article about the rates--the
premium rates in New York State, and maybe you could if that
was the only state in which the premiums were going down. But
in fact, we have seen across the country that as these
preliminary rates come in, they are lower, and in fact, in some
cases, the insurance companies are actually asking to rebid in
the exchanges. And so I think we need to continue to try to
tune this up. I read an article today when the Republican
majority passed the Part D Medicare provisions about 10 years
ago, there was a lot of confusion. All of us worked together to
make those work. It was rocky at first, but it worked, and now
over 90 percent of seniors love those protections. That is what
we should be striving for in a bipartisan way today.
I want to thank you for having the hearing, but I think we
need to move on from this, and I yield back. Thank you.
Mr. Murphy. Gentlelady yields back. Now recognize the
chairman of the full committee, Mr. Upton, for 5 minutes.
OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF MICHIGAN
Mr. Upton. Thank you, Mr. Chairman.
Yesterday the House voted to give to every American the
same option the Administration gave to the business community:
The ability to delay the impact of the health care law on their
family for a year.
It is the right thing to do. Individuals, like businesses,
are subject to reporting requirements, costs, penalties under
the Affordable Care Act. We believe that individuals left to
suffer in the looming rate shock deserve the same treatment
that the Administration awarded to businesses, and I am glad
the House voted in a bipartisan manner to do it yesterday and I
hope the Senate will follow.
As a committee with jurisdiction over this law, and its
implementation, we have a duty to hold the Administration
accountable for its decisions and to make sure that they are
transparent in the process which has sadly been missing
throughout the writing, passage, and implementation of the
health care law.
A great deal of uncertainty surrounds the law. Americans
don't yet know how much their insurance will cost. Reports
indicate that the exchanges are behind schedule. Deadlines have
been delayed and missed entirely.
Today we are going to hear from Mr. Mark Iwry of the
Treasury Department on its decision to delay the mandate for
employers. I hope we will hear the complete story from the
witness today on how this decision was made, who made it, what
the record was before Treasury that prompted it to take the
action 2 weeks ago. Previous hearings before this committee,
Administration witnesses have looked us square in the eye and
assured us that the implementation of the Affordable Care Act
was, in fact, on track. Treasury's decision to delay the
employer mandate confirms that this is not the case. And
yesterday we learned the decision was made in June and the
Administration had been considering the delay ``for a while.''
Why did the ``most transparent Administration in history''
mislead Congress and try to deceive the public? Because it knew
that the law perhaps is bad for business and also bad for jobs.
We now know that the Administration shamelessly waited for
July 4 fireworks to provide a smokescreen for their employer
mandate bombshell. So we need to get a full accounting of this
decision, in the full light of day, so we will be prepared for
what comes our way once enrollment begins on October 1.
One other point that I want to make. I see a lot of public
reports about those that support the Affordable Care Act making
the comparisons to Part D, the Prescription Drug Program,
comparisons that show that it is now rated very favorable among
those people that participate. I would remind my colleagues
that Part D is still a voluntary, not mandatory, program where
folks can change their plans literally every year, have dozens
of choices to make, and yes, there is no financial penalty for
failure to participate.
I yield now to Dr. Burgess.
[The prepared statement of Mr. Upton follows:]
Prepared statement of Hon. Fred Upton
Yesterday the House voted to give to every American the
same option the administration gave to the business community:
The ability to delay the impact of the health care law on their
family for one year.
This is the right thing to do. Individuals, like
businesses, are subject to reporting requirements, costs, and
penalties under the Affordable Care Act. We believe individuals
left to suffer the looming rate shock deserve the same
treatment that the administration awarded to businesses. I'm
glad the House voted in a bipartisan manner to do this
yesterday and I hope the Senate follows suit.
As a committee with jurisdiction over this law, and its
implementation, we have a duty to hold the administration
accountable for its decisions and to make sure they are
transparent in the process which has sadly been missing
throughout the writing, passage, and implementation of the
health care law.
A great deal of uncertainty surrounds this law. Americans
don't yet know how much their insurance will cost. Reports
indicate that the exchanges are behind schedule. Deadlines have
been delayed and missed entirely.
Today we will hear from Mr. Mark Iwry of the Treasury
Department on its decision to delay the mandate for employers.
I hope we will hear the complete story from the witness
today on how this decision was made, who made it, what the
record was before Treasury that prompted it to take this action
two weeks ago. In previous hearings before this committee,
administration witnesses have looked us square in the eye and
assured us that implementation of the Affordable Care Act was
on track. Treasury's decision to delay the employer mandate
confirms that this is not the case.
And yesterday we learned the decision was made in June and
the administration had been considering the delay ``for a
while.'' Why did the ``most transparent administration in
history'' mislead Congress and try to deceive the public?
Because it knew that the law is bad for business and bad for
jobs.
We now know the administration shamelessly waited for July
4th fireworks to provide a smokescreen for their employer
mandate bombshell.
We need to get a full accounting of this decision, in the
full light of day, so we can all be prepared for what is coming
our way once enrollment begins on October 1--or for whatever
rewrite the administration makes next.
This is about fairness.
###
Mr. Burgess. And I thank the gentleman for yielding.
It is of concern that on the evening of July 2, this
provision was suddenly repealed--or delayed. It became
especially of concern to me after hearing from Administration
officials here in this subcommittee that they would definitely
be ready to go with the Affordable Care Act on time and without
delay.
The questions are who discussed this delay? Were there
memos circulating within the departments? Were there secret
meetings with the White House? When did the Administration
start thinking about delaying the reporting provisions? And
what about the individuals that still must comply with the
mandate to purchase their health care coverage? Do they get a
delay as well?
The White House, the Treasury, Health and Human Services
continue to say all systems are go. No problems here, nothing
to look at. Move on. But actually, their actions belie their
words. And unfortunately, it is the American people who will be
left hanging in the balance.
If the gentleman from Texas would like time, I will yield
to Mr. Barton.
[The prepared statement of Mr. Burgess follows:]
Prepared statement of Hon. Michael C. Burgess
Thank you Mr. Chairman,
Since ACA was signed into law 3 years ago, we have only
seen the law's failure to deliver on its promises.
Two weeks ago, the Obama administration announced it would
delay implementation and reporting requirements for the mandate
in the Affordable Care Act which requires employers to provide
insurance or pay a penalty.
While the Administration attempted to bury their
announcement in the midst of the July 4th holiday, they have
only further proved that the President's signature law is not
ready for primetime.
This announcement simply adds to a long list of provisions
in the law that the Administration has delayed or postponed.
Not to mention the provisions that have been so onerous and
burdensome for business and consumers that Congress has already
stepped in and repealed them altogether.
Not only is the law filled with broken promises, but the
July 4th announcement directly contradicts statements that
Administration officials have made before this Committee.
I have been told, time and time again, by officials from
the agencies in charge of implementing the Affordable Care Act,
that it would ``definitely'' be ready to go live on October 1,
2013.
So--where was the disconnect?
When did the Administration start thinking about delaying
the reporting provisions?
Who discussed this delay? Were memos circulated within the
departments? Were there secret meetings with the White House?
OR--is this just an attempt by the Administration to use
perverse incentives to boost enrollment in their exchanges?
Furthermore, within the Administration's embarrassing
admission of delay, they acknowledge the difficult of getting
verification systems up and running. So instead, the
administration will rely on an honor system for reporting.
So what happens if they get it wrong?
The Administration has given a break to big business--
allowing them to delay reporting compliance with the law.
What about the individuals that still must comply with the
mandate to purchase health coverage? Do they get a delay?
While the White House, Treasury, and HHS continue to report
that ``everything is working like it's supposed to'' and ``they
will definitely be ready'', the American people are left
hanging in the balance.
Thank you and I yield back.
Mr. Barton. Well, I appreciate that.
My concern is that we have an Obama--presidential
administration and President Obama that is constitutionally
required to implement all the laws, and in this case,
apparently chose to not implement a part of the very law that
it was so strongly for. So I am going to be asking questions,
where in the Constitution does it give the President and the
Treasury Department the ability to choose to implement this
part of a law but not that part of a law, and if you only going
to implement part, how can you be expected to implement the
rest of it?
I have also got some questions and concerns about this
decision to allow for self-attestation of income to comply with
some of the subsidies. Is the Treasury Department now going to
do away with the W-2 and W-4 forms and let the entire country
self-attest what our income is for purposes of the income tax
code? That is another question that I might have, Mr. Chairman,
but I do appreciate the time and I appreciate the Treasury
Department being here to participate in this hearing.
Mr. Murphy. I thank the gentleman. The gentleman's time has
expired, and now I will go to the ranking member of the full
committee, Mr. Waxman, for 5 minutes.
OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA
Mr. Waxman. Thank you, Mr. Chairman.
The Constitution says a law is something that is passed by
the Congress and signed by the President. And my colleague just
talked about the constitutional responsibility of the President
to uphold the law. What about the constitutional responsibility
of the Congress to make sure that the laws work?
I was shocked when we had the debate on the House Floor
yesterday. A member stood up and said, ``I despise the
Affordable Care Act.'' What passion. What passion. What is it
they despise so much? It is the law. If they want to change
some of it, let's change it. But it just raises real concerns
about--in my mind about where this Republican party is going.
It is a state of mind that talks about taking things away from
people that they desperately want for what purpose? Why should
a state headed by a Republican governor want to deny their poor
people 100 percent funding for Medicaid and leave them with no
coverage at all? You know they have the hospitals and doctors
say why not cover these people? I don't care. We are going to
punish them because we want to punish President Obama. But they
are punishing a lot of people that did nothing to deserve this
kind of treatment.
Something has gone fundamentally wrong when a political
party tries to deny health insurance to millions of American
families just to advance its narrow partisan interest.
This law is going to go fully into effect. Millions of
Americans are already benefitting from its protections.
Millions more will, for the first time, have access to quality,
affordable health coverage.
Yesterday, my staff released a series of reports on the
benefits of this law in each congressional district in this
country. I have these reports, Mr. Chairman, for each member of
this subcommittee, and I would like to ask that they be made
part of the hearing record. Mr. Chairman?
Mr. Murphy. Without objection. I understand you have those
things, I just want to add something, but I will mention it at
the end of your time.
Mr. Waxman. Well I have asked unanimous consent.
Mr. Murphy. Well let me just say I am not going to object
to the unanimous consent. I do add that I will note that this
report does not include information about expected costs and
insurance price increases----
Mr. Waxman. You can put your critique of it in the record--
--
Mr. Murphy. No, I just want to ask unanimous consent that
we can put our Majority staff report from me on the expected
premium increases.
Mr. Waxman. I have no problem with that.
Mr. Murphy. Thank you.
[The information appears at the conclusion of the hearing.]
Mr. Waxman. Today, the Department of Health and Human
Services released a new report finding that in contrast to the
rate shock predictions from Republicans, health insurance plans
under the Affordable Care Act will cost 18 percent less than
predicted. Small businesses can almost save 20 percent over
what they otherwise would have been paying for coverage. I
would like to ask that this report also be made part of the
hearing record. I will reserve that, because----
Mr. Murphy. Thank you. No, we will give you time because I
would like to find out what that report is.
Mr. Waxman. OK. The fact sheets and the HHS report document
that the incredible amount of good this law is already doing.
But rather than acknowledging this and trying to improve on any
flaws, Republicans on this committee and in the House have
launched an unrelenting effort to destroy the Affordable Care
Act. Political analyst Chuck Todd said House Republicans are
``trying to sabotage the law.'' Where does the Constitution say
that members of Congress are supposed to sabotage a law that
they didn't vote for?
USA Today described the actions of Republicans in the
following way: ``Having lost in Congress and in court, they are
now using the most cynical of tactics: trying to make the law
fail. Never mind the public inconvenience and human misery that
will result.''
Yesterday, Republicans voted for the 38th time to repeal or
delay key parts of the health care law. Republican governors
around the country are refusing to take 100 percent for their
low income people for Medicaid. The same governors are making
implementation more difficult by refusing to take the option of
setting up health exchanges. Republicans in the Congress have
refused to provide a dime for implementation of this law, and
now they are attempting to intimidate those who had worked with
the Administration or the non-profit group Enroll America to
help educate the public about the new benefits for which they
are eligible under the Obamacare. And I say that in a positive,
not a pejorative, way.
It does not have to be this way. When the Bush
Administration passed and implemented Medicare Part D,
Democrats and Republicans made sure the Administration had
adequate funding to implement the law. I voted against Medicare
Part D. We could have done a much better job to provide
prescription drugs. I didn't prevail. The law was passed. We
worked to spread the word about the new Medicare benefits that
included a $300 million public relations campaign and a bus
tour by Administration officials that stopped in 100 cities.
The goal of this hearing is not to improve the law; the
goal is to sabotage the law, regardless of the damage inflicted
on the health care system or the millions of American people
who, for the first time, will be able to receive affordable
health insurance coverage. I think that is the wrong approach,
Mr. Chairman. The Affordable Care Act is providing important
benefits. I know Republicans said they want to repeal it, and
then replace it. They have never given us a decent replacement.
They are not talking about anything constructive----
Mr. Murphy. I think the gentleman's time is expired.
Mr. Waxman [continuing]. It is all negative.
Mr. Murphy. Thank you.
Mr. Waxman. I yield back the balance of my time.
Mr. Murphy. I would now like to introduce our witness for
today's hearing. The Honorable Mark Iwry is a senior advisor to
the Secretary and Deputy Assistant Secretary for Retirement and
Health Policy at The United States Department of Treasury. In
this capacity, he is the reporting authority for the Office of
the Benefits Tax Counsel and provides advice and counsel to the
Secretary and the Assistant Secretary regarding tax issues
related to retirement savings, health care, and employee
benefits.
I will now swear in Mr. Iwry. You are aware that this
committee is holding an investigative hearing, and when doing
so has had the practice of taking testimony under oath. Do you
have any objections to testifying under oath?
Mr. Iwry. No, Mr. Chairman.
Mr. Murphy. The chair then advises you that under the rules
of the House and the rules of the committee, you are entitled
to be advised by counsel. Do you desire to be advised by
counsel during your testimony today?
Mr. Iwry. No, sir.
Mr. Murphy. In that case, if you would please rise and
raise your right hand? I will swear you in.
[Witness sworn in.]
Mr. Murphy. You are now under oath and subject to the
penalties set forth in Title 18, Section 1001 of the United
States Code. You may now give a 5-minute summary of your
written statement.
TESTIMONY OF J. MARK IWRY, SENIOR ADVISOR TO THE SECRETARY,
DEPUTY ASSISTANT SECRETARY FOR RETIREMENT AND HEALTH POLICY,
U.S. DEPARTMENT OF TREASURY
Mr. Iwry. Thank you, Chairman Murphy, Ranking Member
DeGette, members of the subcommittee. Good afternoon. I am
pleased to appear before you today.
As you know, on July 2, the Treasury Department announced
that it would provide a 1-year transition relief period for
2014 with respect to three provisions of the Affordable Care
Act that the Act added to the internal revenue code.
First, information reporting requirements for self-insuring
employers, insurance companies, and other entities that provide
health coverage. Second, 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,
describing and providing this transition relief. Treasury is
providing the transition relief after reviewing comments on
reporting requirements and related discussions, and comments
with employers and other stakeholders. Employers and their
representatives requested transition relief for 2014 because of
concerns about the difficulty or cost 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 that 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 2014, an
additional year, would be provided before the reporting
requirements began. This is designed to meet two primary
concerns raised by stakeholders. First, it allows for an
additional dialogue and consideration of ways to simplify the
new reporting process, consistent with effective implementation
of the law. Second, it gives employers more time, which many
have requested, to adapt health coverage and reporting systems
as they move toward making coverage affordable and accessible
for their employees. Once reporting rules have been issued,
employers, insurers, other reporting entities are encouraged to
report voluntarily for 2014. Allowing time for real world
testing of reporting systems for 2014 will contribute to a
smoother transition to full implementation in 2015.
Employer reporting is integral to administration of the
employer shared responsibility provisions. Because of the 2014
transition relief, 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. As a result, as further explained in my written
statement, the transition relief for reporting will make it
impractical to determine which employers owe shared
responsibility payments for 2014. Accordingly, we have extended
the transition relief to the employer shared responsibility
provisions so that no such payment will be assessed in 2014.
In preparation, though, for the application of the
reporting and employer responsibility provisions in 2015,
employers and others are encouraged to report voluntarily for
2014 and maintain or expand health coverage in 2014.
The transition relief provided in this notice is an
exercise of the Treasury's longstanding administrative
authority under the tax code. This authority has been used to
provide transition relief for taxpayers seeking to comply with
new legislation and to provide a wide range of other guidance.
In particular, on a number of prior occasions across
administrations, this authority has been used to postpone the
application of new legislation when immediate application would
have subjected taxpayers to unreasonable administrative burdens
or costs.
Finally, the transition relief does not affect employees or
other individuals' access to the premium tax credits available
beginning in 2014; 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 employer reporting
would make it impractical to implement the employer
responsibility provisions, it would not have a comparable
impact 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, the Affordable Care Act is projected to
provide coverage for tens of millions of Americans. Together
with the other departments involved, Treasury is implementing
this Act to build on the progress already made toward better
and more affordable coverage. We welcome the opportunity to
further work with the committee to achieve these objectives,
and I look forward to answering your questions.
[The prepared statement of Mr. Iwry follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Murphy. Thank you, Mr. Iwry. I will recognize myself
now for 5 minutes.
In your public posts in this law and in the information
submitted to this committee, you claim that you have
administrative authority to grant relief under the Internal
Revenue Code. Do you have the ability to utilize this
transition relief for the individual mandate?
Mr. Iwry. Mr. Chairman, we have not----
Mr. Murphy. It is a yes or no.
Mr. Iwry. Mr. Chairman, we have given a lot of
consideration to our authority----
Mr. Murphy. You do have the authority or not?
Mr. Iwry. We have not considered that question whether we
would have the authority to provide similar transition relief
with respect to the individual responsibility.
Mr. Murphy. Well wait, so is it your position that there
are limits on the authority that prevent Treasury from delaying
the individual mandate, and if so, I mean, is there any limits
at all? Are you able to do anything with the individual
mandate?
Mr. Iwry. There certainly are limits, Mr. Chairman, to the
Treasury's authority to provide this kind of transition relief,
and the limit----
Mr. Murphy. Do you have information there about some of the
burdens and costs involved with the individual mandate or the
business mandate? Do you have information in front of you that
you are referring to about some of those burdens and costs for
businesses and individuals?
Mr. Iwry. Mr. Chairman, we have considered the burdens----
Mr. Murphy. Do you have information in front of you on the
burdens and costs for individuals and businesses? That is a yes
or no. Do you have information in front of you on the burdens
and costs--I am going to yield myself more time, because you
are not answering my question. Do you have information in front
of you on the burdens and costs for individuals and businesses?
That is a simple yes or no. I just want to know.
Mr. Iwry. Yes, qualitative information.
Mr. Murphy. I would like you to submit that to the
committee so that both sides have a chance to review that. I am
going to order that.
I am going to continue on here. So when you are looking at
individual costs in business, who looked at this authority for
Treasury to be able to make this decision that you can waive
these things for the individual? Who in your department did
that?
Mr. Iwry. Mr. Chairman, the Office of Tax Policy----
Mr. Murphy. Who? Were you involved in those discussions?
Mr. Iwry. I was only tangentially involved, mainly.
Mr. Murphy. So communications were related to you about
those? Communications were made to you about the content of
those meetings, those discussions?
Mr. Iwry. That is correct, Mr. Chairman.
Mr. Murphy. We would like to see the notes, emails, and
things from those communications, because we would like to find
out about how this decision was made. Can you provide that for
the committee?
Mr. Iwry. I don't recall, Mr. Chairman, that there were--
whether there were written communications about that, but the
Treasury Office of Tax Policy has for decades----
Mr. Murphy. We will cover history another time, sir. I want
you to focus on our questions. Things will go smooth if that
happens.
Before the announcement of the delay of the employer
mandate, did you do an analysis of the constitutionality of the
delay?
Mr. Iwry. I did not.
Mr. Murphy. Did anyone that you communicated with do an
analysis of constitutionality of the delay? For example, have
you reviewed any memoranda or participated in any discussions
at all about the authority to delay these provisions in the
Affordable Care Act?
Mr. Iwry. Yes, Mr. Chairman. The----
Mr. Murphy. What I would like you to do is submit for the
record information from those discussions.
I want to ask you, too, as long as we are on the topic of
waivers. I got a letter here from the International Brotherhood
of Electrical Workers, the Electrical Workers Union, and it
says that we cannot afford to sit on the sidelines as this law
imposes increased benefit costs, fees, and new taxes. If these
concerns are not addressed, it is likely that the majority of
multi-employer health plans will dissolve and that 26 million
covered individuals will lose their plans. They also managed to
put a full-page ad--I think this was in roll call--also
addressed these issues to Congress and to the President. This
begs the question, do you agree that implementation of the
Affordable Care Act is jeopardizing multi-employer plans and
the individuals they cover? I might add, Mr. Jimmy Hoffa also
published something in this, too. Do you agree that multi-
employer plans are in jeopardy here too for these 26 million
Americans?
Mr. Iwry. Mr. Chairman, the multi-employer plans are going
to be able, we believe, to comply with this law in a way that
does not jeopardize coverage for----
Mr. Murphy. Well, Jimmy Hoffa from the Teamsters and IBW
and the National Electrical Contractors Association are saying
it does not, so will you be reviewing about giving them a
waiver as well?
Mr. Iwry. Mr. Chairman, there have been requests----
Mr. Murphy. Let me ask this. Do you have the authority to
offer that waiver?
Mr. Iwry. We have not--what sort of waiver are you
referring to, Mr. Chairman, if I may ask?
Mr. Murphy. The kind of waivers you have been offering
other people. The kind of waivers you are offering other
people. I just want to know. I would like an answer to this
question, without being desultory here. So if they like the
coverage 26 million Americans have through the unions, can they
keep it? Do you have the authority to waive that?
Mr. Iwry. Mr. Chairman, the coverage that members of the
plans sponsored by the multi-employer unions have is coverage
that they can keep.
Mr. Murphy. Mr. Iwry, Jimmy Hoffa, the Teamsters, IBW, and
other groups are saying they do not, and I would like you to
submit an answer for the record of A) if you have the authority
to offer them waivers, and B) what they will be. I know I am
over time here, but I am sure the members will follow up. I
yield to Ms. DeGette for 5 minutes.
Ms. DeGette. Now Mr. Iwry, the Treasury delayed the
employer mandate, is that correct, by 1 year, correct?
Mr. Iwry. Ms. DeGette, the Treasury provided transition
relief with respect to the----
Ms. DeGette. And delayed the----
Mr. Iwry [continuing]. Employer responsibilities.
Ms. DeGette. Correct?
Mr. Iwry. Correct.
Ms. DeGette. And what section of the Internal Revenue Code
did they do that under?
Mr. Iwry. The transition relief is an exercise of the
Treasury Department's administrative authority under Section
7805(a).
Ms. DeGette. And what exactly does Section 7508--I am
sorry, 7805(a) say?
Mr. Iwry. Section 7805(a) of the Internal Revenue Code
provides that the Secretary shall prescribe all needful rules
and regulations for the enforcement of this title, including
all rules and regulations as may be necessary by reason of any
alteration of law in relation to internal revenue.
Now what that means in this context, Congresswoman, is not
that it gives Treasury authority to ignore the statute or parts
of the statute, but rather that it allows us to implement the
law more effectively, specifically----
Ms. DeGette. OK, let me stop you right there, and let me
ask you, to your knowledge, does Treasury intend to take any
other steps under Section 7805(a) to delay any other provisions
of the Affordable Healthcare Act? Are you contemplating using
what you view your authority under the Act to delay any other
provisions of the ACA? I think that is what the chairman was
trying to get at.
Mr. Iwry. Congresswoman, we do not have--first of all, let
me make clear, this transition relief does not have any impact
on any other----
Ms. DeGette. That is correct.
Mr. Iwry [continuing]. Expected date----
Ms. DeGette. Is it the intention of the Agency----
Mr. Iwry [continuing]. Under the Act.
Ms. DeGette [continuing]. To use Section 7805(a) to delay
any other provisions of the ACA? That is a pretty easy
question.
Mr. Iwry. Right. Consistent with our normal process in
implementing new legislation----
Ms. DeGette. Yes.
Mr. Iwry [continuing]. We will evaluate the need for any
other possible transition relief on a case-by-case basis if
there is a reason sufficiently compelling circumstances to----
Ms. DeGette. To your knowledge, does the Agency intend--at
this point, do you know of any other delays?
Mr. Iwry. We don't have any specific provision that we have
identified for which we would----
Ms. DeGette. Thank you. And if further requests come in,
you will evaluate those? That is what you are trying to tell
me?
Mr. Iwry. I am sorry?
Ms. DeGette. If further requests come in like came in from
the business community, what you are saying is you will
evaluate those within the Agency's authority. Is that correct?
Mr. Iwry. That is correct.
Ms. DeGette. OK. Now has Treasury ever used this authority
before to delay or modify other tax rules?
Mr. Iwry. Yes, Congresswoman----
Ms. DeGette. Could you describe maybe one or two examples,
very briefly?
Mr. Iwry. Yes. Treasury has traditionally interpreted this
authority to allow implementation of statutes in a manner that
is best designed to give effect to their terms, including
transition relief, as appropriate in connection with situations
where the law has changed.
Ms. DeGette. OK, do you have an example of that?
Mr. Iwry. Right. My written testimony contains a whole
series of specific examples, as you suggest, Congresswoman, in
the tax law. Let me mention one or two of them here.
Ms. DeGette. How about one? We have got 53 seconds left.
Mr. Iwry. Sure.
Ms. DeGette. Thank you.
Mr. Iwry. Basis reporting rules for investment securities
were enacted in 2008. Treasury and IRS issued proposed
regulations on those for debt instruments and options. The
statutory effective date was January 1, 2013, as reflected in
the regulations, and after numerous comments from taxpayers
that this proposed effective date did not give them enough time
to program their information systems, Treasury and the IRS
issued a notice postponing the effective date to January 1,
2014.
Ms. DeGette. OK. Let me ask you a question, because I am
running out of time. So I know you think the authority is
clear. You are saying that you could do it here. You are going
to look at any other situations that come up, but you know, we
have institutional prerogatives, too, and when we write a law,
we expect that it will go into effect. I can't tell whether my
friends on the other side of the Aisle object to this delay or
think everything else should be delayed, but what I am hearing
you say is it is not the intention of your agency to
indefinitely delay this mandate or to ignore it completely or
to do this wholesale with the rest of the ACA, is that correct?
Mr. Iwry. That is----
Ms. DeGette. Yes or no would be good, since I am out of
time.
Mr. Iwry. That is correct.
Ms. DeGette. Thank you very much.
Mr. Murphy. And the gentlelady's time is expired. Now
recognize the vice chair of the committee--full chair of the
committee Mr. Upton is not here, so we will go to Ms.
Blackburn, vice chair, for 5 minutes.
Mrs. Blackburn. Thank you, Mr. Chairman, and Mr. Iwry,
thank you so much--I am over here--for your time to be with us.
I want to go right back to what the chairman of the full
committee--the subcommittee was talking with you about is where
you got this authority and what you think gives you this
authority. So this is a really simple yes or no. Does Treasury
have the authority to delay the individual mandate under the
healthcare law? Yes or no?
Mr. Iwry. Congresswoman, as I mentioned, Treasury has not
yet had occasion to consider whether it would have authority to
delay or to give transition relief with respect to individual--
--
Mrs. Blackburn. So your presumptiveness on the request from
the business community that this thing is half-baked and not
ready for primetime, you chose to delay the employer mandate.
So what you are saying is you do not know if you do or do not
have authority to delay the individual mandate?
Mr. Iwry. Congresswoman, we have not had occasion because
we have not found that the individual mandate presented the
kinds of administrative difficulties for individuals----
Mrs. Blackburn. Well let me just interject right here,
because we can show you plenty of surveys and evidence that it
is causing tremendous disruption in the healthcare community
and in the individual health insurance marketplace.
I will try this another way. Why is it possible to delay
the requirements on business but not on individuals?
Mr. Iwry. Congresswoman, when we considered whether to
provide this transition relief, we were motivated by the
concerns that were raised with us and with Congress by those
who would be providing coverage and continuing to provide
coverage that the reporting requirements under the employer
responsibility conditions----
Mrs. Blackburn. So then what you are telling me is that
this is too cumbersome for our business community to comply
with? Would that be a statement that matched what you found? It
is too cumbersome?
Mr. Iwry. Congresswoman, what we found was that the
business concerns----
Mrs. Blackburn. OK, you are running the time----
Mr. Iwry. That they needed more time.
Mrs. Blackburn. Yes, well, you are running my time out. You
are running my time out by trying to talk as slow as I talk and
I don't appreciate it, quite frankly.
Let me tell you what I am finding, and it shows that you
have great sympathy for big business and that you are trying to
cater to big business, but not to hardworking taxpayers and
small business people that are fighting every single day
against this law. Because it is redefining--I tell you, I agree
with what the unions wrote to the Democrat leadership. This is
redefining the 40-hour work week in this country, and I think
you agree with that because of the actions that you took. It is
redefining what benefits are for individuals. This is wrecking
what employers are providing for individuals because you all
want to put this out there that is going to destroy the
healthcare marketplace and destroy the doctor-patient
relationship. And you are saying--you are making this that you
are motivated by concerns. Well let me tell you what concerns I
am motivated by, and it is men and women who are going to work
every single day and are seeking to do the best for their
families. They want the ability to make these decisions. They
do not trust bureaucrats in Washington, D.C. to make these
decisions, and quite frankly, I don't think they appreciate
some of the attitudes when you come in and you are unprepared
and unwilling to answer a simple yes or no. What gives you the
authority and do you have the authority, and if you do have the
authority or think you do, and you think it was a
constitutional act, then for heaven's sake, why would you favor
big business and then vote against hardworking men and women
with the actions that you took?
I yield back.
Mr. Murphy. Gentlelady yields back. Recognize the
gentlelady from Florida, Ms. Castor, for 5 minutes.
Ms. Castor. Well thank you, Mr. Chairman.
Boy, I have a different view. I think the Affordable Care
Act is working for families and it is certainly working for
small businesses, and we have a ways to go. So I would hope
that now that it is law, the Supreme Court has ruled. We are
moving into significant areas of implementation. We can begin
to all work together to ensure that it works for families
across America and on all businesses, small and large.
I would like to highlight what Chairman Waxman said early
on. There are some new statistics out, and it is helpful
because they are broken down by congressional district, that
demonstrates how the law is helping families. And just a few
great statistics from my own community--and keep in mind that a
congressional district, the population now is estimated to be
about 700,000. So what I learned yesterday is in my own
congressional district, under the Affordable Care Act, almost
10,000 young adults in my district now have health insurance
because they have been able to stay on their parents' plan.
Almost 6,000 seniors in my district have received prescription
drug discounts worth $8.2 million. That is an average of $610
per person in 2011, $690 in 2012, and $840 in 2013. You better
believe my seniors can use a few extra dollars in their
pockets. My Medicare neighbors, they now have access to free
preventative services that they didn't have before without
paying a co-pay. Children are no longer barred from getting
insurance because they have a preexisting condition, like
childhood cancer or asthma. These are very important consumer
protections that the ACA has provided. And now the rebates are
coming in. We expect another round of rebates. In the entire
Tampa Bay area alone so far, my families have gotten $47
million back from insurance companies. And then the President
announced that the White House says that there is another round
coming this summer. We anticipate in the State of Florida alone
we are--consumers, families are going to get back another $54
million, because under the law, we say most of the co-pays and
premiums that people work hard to pay will go to actual
healthcare and not to exorbitant salaries or profits. So this
is good news and I hope we can all work together.
Now Mr. Iwry, thank you for being here. I want to ask you
about the extent to which the decision to implement a business
transition relief period to those--some of those businesses is
going to work. Now as of today, most large employers in America
already offer coverage to their employees, correct?
Mr. Iwry. Congresswoman, the vast majority of larger
employers already offer coverage.
Ms. Castor. In fact, it is about 160 million Americans
today already receive health insurance through their employers.
And when we talk about the larger employers, we are talking
about employers that have 50 or more employees, is that
correct?
Mr. Iwry. For this purpose, yes, Congresswoman.
Ms. Castor. And I know this might not be your area of
expertise, but why do employers, why do businesses provide
health insurance to their employees?
Mr. Iwry. Congresswoman----
Ms. Castor. Kind of the way the unique American health
system has grown up over the decades. Your health insurance is
tied to your job, but why do businesses provide health
insurance?
Mr. Iwry. Congresswoman, I think there are several reasons.
One is that businesses find that offering important key
benefits like health insurance makes it easier to recruit
valuable employees.
Ms. Castor. I think that is right. I think if you were--if
you had two jobs in front of you and you had one that offered
health coverage for you or your family, and the other that did
not, that makes it more attractive to go work for that
employer, and that is why over time most employers do that. It
gives them an advantage.
Now is there anything in your purview that changes the
calculus here for the way that works?
Mr. Iwry. Well that is, of course, still the case as well
as to retain valued employees as they grow older, and----
Ms. Castor. Right.
Mr. Iwry [continuing]. Prior to this----
Ms. Castor. And nothing changes that. Now there is another
part of the ACA--and I take umbrage at what my colleague from
Tennessee said--this law is going to provide substantial tax
credits to our small businesses at home. In fact, over 360,000
small businesses across America have already taken advantage of
those new tax credits. We anticipate this to grow. Mr. Iwry,
did Treasury's recent decision impact the small business tax
credits provided under the ACA?
Mr. Iwry. Congresswoman, it did not impact the small
business tax credits or the premium tax credits worth several
hundred billion dollars for individuals, which are central to
the whole legislation here, nor did it affect the marketplaces.
Mr. Murphy. Thank you. Gentlelady's time is expired. Now
recognize the chairman emeritus of the committee, Mr. Barton,
for 5 minutes.
Mr. Barton. Thank you, Mr. Chairman. On July the 9th, the
Assistant Secretary for Tax Policy, Mark Mazur, replied to a
letter that myself and I think almost every Republican on this
subcommittee had sent to the Treasury Secretary, asking for--
why this particular part of the law was delayed and what the
authority was from it. In that letter, on page two, it says
that the legal authority to delay was based on the
administrative authority under Section 7805(a) of the Internal
Revenue Code. Well, I have Section 7805(a) of the Code, and I
am not an attorney, nor am I a tax expert, but what Section
7805 of the Revenue Code says is that unless explicitly
authorized somewhere else so that some other official has the
authority, the Secretary of the Treasury shall prescribe all
needful rules and regulations for the enforcement of this
title, including all rules and regulations as may be necessary
by reason or any alteration of the law in relation to Internal
Revenue. It says nothing about giving authority to not
implement, and in the Affordable Care Act, as Congresswoman
Blackburn pointed out, there is not an opt-out clause. There is
not a you shall do this unless you decide it can't be
implemented, in this case, you can delay. The law was passed on
March 23 or signed into law on March 23, 2010. That is over 3
years ago. So we are now getting to the point where you
actually have to implement it, and lo and behold, the Secretary
of the Treasury has decided to pick and choose which parts of
the law to implement. Other than this Section 7805, is there
any other authority anywhere else that gives the Secretary of
the Treasury, and I would assume in consultation with the
President of the United States, to pick and choose which parts
of which laws that he or she implements?
Mr. Iwry. Mr. Chairman, Section 7805(a) is, in our view,
sufficient authority and in the view of previous Treasury
Departments across various administrations, to, in an
appropriate case, implement statutes in a way that is best
designed to give effect to their terms, including providing
transition relief, as appropriate when there is what the
provision refers to an alteration of the law----
Mr. Barton. Well, 3 \1/2\ years from the law's passage, it
is pretty weak to say this is transition relief. And it is
explicit in the law that it shall be implemented in the
Affordable Care Act, and it is explicit in this Section 7805
that you are supposed to prescribe--the Secretary, that is--
needful rules and regulations for the enforcement, not for the
non-enforcement. I am not an attorney but I don't believe you
have got the legal authority, the Secretary of the Treasury, to
do what you all just did.
I do have a question. This decision to delay
implementation, was it done in consultation with the White
House, upon the direction of the White House, or without any
input from the White House?
Mr. Iwry. Mr. Chairman, it was--this decision to provide
transition relief with respect to the reporting provisions for
employers----
Mr. Barton. To delay implementation, I don't consider that
transition relief. The decision to not implement one of the key
components of the Affordable Care Act, did the Secretary of the
Treasury, with advice from people like you who are senior
advisors to the Secretary, did you all do this on your own or
did you do it at the direction and consultation or with input
from the White House?
Mr. Iwry. Mr. Chairman, the Treasury Department did not do
this without coordination with the White House. It was not at
the direction, but it was with----
Mr. Barton. So the President knew about this?
Mr. Iwry [continuing]. Coordination and consultation----
Mr. Barton. The President knew about this before it was
announced?
Mr. Iwry. Mr. Chairman, I don't personally have a basis for
knowing what the President knew at what point in time, but
certainly to answer your question fairly, the White House was
involved. The Treasury kept----
Mr. Barton. Normally intelligent people can assume the
President knew about this before the fact, was friendly towards
it, probably, I would assume, directed it, but at least was
strongly supportive of it. It wasn't done against his
opposition.
Mr. Iwry. Mr. Chairman, I have no reason to think that it
was or would have been done had he been opposed to it.
Mr. Barton. My time is expired. I appreciate your candor. I
will yield back.
Mr. Murphy. Gentleman's time is expired. Now to the
gentleman from North Carolina, Mr. Butterfield, for 5 minutes.
Mr. Butterfield. Thank you very much, Mr. Chairman, and
thank you for your testimony today. You know, Mr. Barton, I
would stipulate that the President was aware of this change in
policy, and he would be derelict if he was not aware of the
change. And so I certainly believe that he was, and thank him
for making this important administrative decision.
The President's decision to delay the employer mandate I
think has gotten too much attention. I think we need to be
using this energy and this time to try to find ways to make the
Affordable Care Act work, and I am trying to listen very
carefully at the debate today to try to figure out if my
friends on the other side of the Aisle feel that the employer
responsibility delay should be repealed or whether the
individual mandate should be delayed. I can't quite figure out
where you are going with this. I have always looked at you as
my friends over on the other side as being friends of business,
and now today you seem to be really championing the rights of
individuals. I am glad to see that progress. I wish you would
join me in North Carolina to try to champion individuals who
are poor people in North Carolina who are not going to be able
to benefit from the Medicaid expansion. And so I just want to
talk about the business aspect of this and try to get some
answers on the record.
Sir, correct me if I am wrong. Firms with fewer than 50
full-time equivalent employees are not subject to the employer
responsibility provisions of the Act. Is that correct?
Mr. Iwry. Congressman, firms with fewer than 50 full-time
employees or full-time equivalent employees----
Mr. Butterfield. It doesn't apply to them at all.
Mr. Iwry [continuing]. Are not subject to the employer
responsibility provisions of the Act.
Mr. Butterfield. Now or in the future, the foreseeable
future, is that right?
Mr. Iwry. The statute, Congressman, does not provide at all
for businesses smaller than 50 to be subject to that
requirement.
Mr. Butterfield. Am I correct, then, that the vast majority
of U.S. businesses have fewer than 50 employees? That is the
impression that I get.
Mr. Iwry. Congressman, it is generally been estimated that
roughly 95 percent of employers in the United States would be
below that threshold.
Mr. Butterfield. Well, am I correct that the vast majority
of employers with more than 50 full-time employees already
offer coverage to their employees?
Mr. Iwry. Congressman, that is also correct. Roughly a
similar percentage that is about 95 percent of employers above
50 in size have been estimated--it has been estimated that
those employers do provide coverage currently to their
employees.
Mr. Butterfield. The number of businesses that we are
talking about seems to be getting smaller and smaller and
smaller. So many of the employers that would have been affected
by the employer mandate already offer coverage that meets the
standards in the law. So what we are really talking about is a
limited--a very limited number of companies that are affected
by the mandate and the delay. And so for all the sound and fury
over the mandate delay, the core of the law remains reform of
the individual insurance market. That is what this thing is all
about. Where people buy coverage when they do not get it
through their jobs, and I can tell you, I represent a district
in North Carolina. I don't know about my friends who are in
other seats in this committee, but the vast majority of the
people that I represent are ready for implementation, full
implementation of the Affordable Care Act.
And so I want to thank you, sir, for your testimony today.
I think my friend on the other side who criticized your method
of speaking owes you an apology, because your response to my
questions was equal in tone and pace and cadence as it was to
the other members of this committee. I think without knowing
your personality and knowing the way you express yourself that
you are owed an apology. I yield back.
Mr. Murphy. Gentleman yields back. I now recognize the
gentleman from Texas, Mr. Burgess, for 5 minutes.
Mr. Burgess. Thank you, Mr. Iwry. Thank you for being here.
I want to pick up where Mr. Barton left off. I have got
about three areas that I want to cover, so I apologize if it
seems like we are going to go fast. And then I have got some
other questions I am going to submit for a written response.
When did you know that the mandate for the businesses was
going to be delayed? That is not a yes or no question, but it
is a calendar day. When did you know?
Mr. Iwry. Mr. Burgess, I knew that this transition relief
would be granted sometime last month, the month of June.
Mr. Burgess. June 25, June 27? Do you have a date? Would
there be a meeting that took place? Would there be a phone
call? Would there be a record of some type that you could
provide to this committee?
Mr. Iwry. Congressman, I don't recall any specific meeting
or phone call.
Mr. Burgess. May I ask that you look at your logs and your
records and see if you can refresh your memory and provide that
to the staff of this committee?
Let's move on, because I got a lot of stuff to do and we
have already discussed how slow I talk. Who made the decision
to delay the employer mandate? Was that made exclusively at
Treasury, Health and Human Services? Did they have any role at
all, or was it also the White House that was involved? You told
Mr. Barton that the White House was aware. Were they actually
involved, actively involved in the decision-making process?
Mr. Iwry. Congressman, policy decisions under this
legislation, in particular under the Affordable Care Act,
policy decisions generally that are made by the Treasury
Department are coordinated with the White House----
Mr. Burgess. So who did you talk to? Who did you discuss
this with? Who did you coordinate with in the White House?
Mr. Iwry. I was not--Congressman, I was not privy to all
the conversations.
Mr. Burgess. Well let me just ask you a question. This was
odd the way this happened at 6:00 p.m. Eastern time on July the
2nd. I think it caught a lot of us by surprise. Valerie Jarrett
put it out in a blog post. Was there any discussion with you
and Valerie Jarrett prior to her posting this on the blog site?
Mr. Iwry. Congressman, I don't recall having had any
discussion with Ms. Jarrett about this, and indeed, I am a
policy person, not someone who deals with communications or
media relations, or congressional relations, so----
Mr. Burgess. But sir, this was a big deal and it was rolled
out at an odd time. Once again, will you review your logs and
your email? Were you copied on any email or was Valerie Jarrett
copied on any email to you? Can you provide that to this
committee, because I think it is important to our understanding
of this process.
Mr. Iwry. Congressman, I am not the person at Treasury to
respond to the question----
Mr. Burgess. Well then who is that?
Mr. Iwry [continuing]. What we can--sorry.
Mr. Burgess. Well fine. We can subpoena all of your records
if that is what you would prefer.
Mr. Iwry. Congressman, we are happy to cooperate with the
committee.
Mr. Burgess. Thank you.
Mr. Iwry. And I will refer this to the people at Treasury
who would be dealing with this.
Mr. Burgess. Thank you. The reason this is important is we
had Secretary Sebelius and Mr. Cohen from Center for
Communications Insurance Oversight here at this committee at
the very end of April. From them, no delay, we will be ready,
it will be on time. I specifically asked Mr. Cohen about
contingency plans. I specifically asked Mr. Cohen are you
planning on any delay? Are you planning on narrowing the scope
of what is provided, and even after I reminded him that he was
under oath, he replied no. So somehow between April 30 and June
25, that all changed in a big way. And what we are trying to
understand in this committee is how did that happen? What was
the process? What was the trigger that occurred that caused
such a massive change from no delay, we will be ready, to wait
a year. Do you understand the concern?
Mr. Iwry. Congressman, I understand your question, yes, and
I would be happy to try to address that now, if I might.
Mr. Burgess. Well let me ask you this. What does a deadline
mean? Are you aware of the phrase ``deadline''?
Mr. Iwry. Congressman, we try our best at the Treasury
Department to comply with the statutory timeframes and
deadlines. We had a request here from--many requests from the
plan sponsor committee----
Mr. Burgess. Well let me ask you this. I mean, a lot of
times we are accused of writing gobbledygook in our laws, but
this is pretty straightforward. The amendments made in this
section shall apply to the months beginning after December 31,
2013. That is pretty clear, isn't it?
Mr. Murphy. Gentleman's time is expired.
Mr. Burgess. And it sounds like a deadline, and I would
appreciate a response from your office in writing what deadline
means to you and your office. I will yield back.
Mr. Murphy. Gentleman's time is expired. Now recognize the
gentleman from New York, Mr. Tonko, for 5 minutes.
Mr. Tonko. Thank you, Mr. Chair.
Mr. Iwry, before I ask you some questions, I just wanted to
highlight some of the profile in my congressional district with
the ACA. I have more than 12,000 seniors in the district
receiving prescription drug discounts worth some $16 million,
an average discount of $610 per person in 2011, and $650 in
2012, and some 124,000 seniors in the district now eligible for
Medicare preventative services without paying any co-pays, co-
insurance, or deductible. And up to 27,000 children in the
district with preexisting health conditions no longer being
denied coverage by health insurers. And I just wanted to
highlight that for the record, because it is part of the
strength of the ACA.
Again, Mr. Iwry, one concern raised by critics of the
Treasury decision is that it will impact the verification
process for individuals on the exchanges. I want to read you a
quote from Uval Levin, a conservative critic of the law, and he
says, and I quote, ``The most serious problem for the
Administration with this delay of the employer mandate is the
effect on the liability of the exchanges. Under the law,
eligibility for exchange subsidies depends on an individual not
receiving an affordable offer of qualified insurance from an
employer. If employers will now not be required to report on
their insurance offerings in 2014, I don't see how the
government will be able to determine eligibility for subsidies
and therefore how the exchanges will be able to function.''
Mr. Iwry, is this a legitimate concern?
Mr. Iwry. Congressman, the impact of the transition relief
with respect to employer and insurer reporting on the
functioning of the marketplaces and the ability to verify is
something that was considered carefully as part of the
decision-making process, together with many other factors,
including the potential impacts of the decision on coverage and
cost. And the conclusion was that the administration of the
individual responsibility provisions could go forward without
being unduly hampered by the lack of employer reporting partly
for a year, except to the extent employers report voluntarily,
which they are encouraged to do. Partly because the individual
in going to the exchange would receive an employer form that
provides information about their coverage, the individual would
normally know during the open season with the employer through
the summary of benefits and coverage that employers would be
providing to employees, whether they had coverage or not, and
therefore would be able to go to the exchange and know whether
they are potentially entitled to apply for a premium tax credit
at the exchange if their income otherwise permits. So the
individual has the wherewithal to apply, determine whether he
or she is entitled to apply for a premium tax credit to help
them pay for this coverage, regardless of that employer report,
and indeed, the employer report is something that the exchange
provides to ultimately--information about employer coverage is
something that the exchange also provides to the IRS when the
IRS then does a second check of the individual's eligibility
for the tax credit on reconciliation, after the individual
files the return. The IRS gets information from the exchange
about what the employer provided as a result of what the
employer provides, information the employer reports to the
individual. The individual can fill out their 1040, knowing
whether they have coverage or not, knowing whether they are
exempt from individual responsibility or not, and in the very
few cases, the small percentage of cases where a person is
expected to owe a payment, they will have the tools on their
1040 to make the payment.
Mr. Tonko. Thank you. Thank you very much for the
clarification, and with that, I yield back.
Mr. Murphy. Gentleman's time is expired, and I now
recognize the gentleman from Texas, Mr. Olson, for 5 minutes.
Mr. Olson. I thank the chair, and I thank Mr. Iwry for
appearing to explain how the Administration decided to delay
Obamacare's employer mandate.
I didn't think it was possible, sir, but the
Administration's actions created more uncertainty back home in
Texas 22 over Obamacare's impacts on their families and
businesses. The employer mandate was a low murmur compared to
the full repeal war I heard after March 23 of 2010 when
Obamacare was passed, but that changed when the employer
mandate was delayed. That became a full-on war back home in
Texas 22. And that war is locked on two questions. One, how can
I plan for the future prosperity of my family? How can I plan
for the future prosperity of my business? The second question,
what change is coming next?
Sir, under the Constitution of the United States, it is my
job, my sacred duty to get answers to those questions for these
700,000 people, Texans who live in Texas 22. Sir, I need, I
demand the cooperation to get those answers.
And now the facts. It seems this delay was ready for
primetime by June 24 of this year. I say that because CMS
Administrator Marilyn Tavenner testified yesterday that she was
made aware of the delayed employer mandate that was being
considered on June 24 of this year. Yesterday. In your
testimony in front of the Ways and Means Subcommittee and right
here just about 10 minutes ago, you stated that Treasury's
final decision to postpone the Affordable Care Act's employer
mandate was made ``sometime in June.'' It was considered in a
very careful way for a while. My question, sir, who in Treasury
took part in the careful consideration in the month of June? I
need names and positions, please.
Mr. Iwry. Congressman, would you like me to start with your
last question or your first one?
Mr. Olson. I need names and positions to my question. Who
took part in this careful consideration in the month of June?
Names and positions, please.
Mr. Iwry. Congressman, the authority to make a tax policy
regulatory decision resides in the Assistant Secretary--this is
the position--the Assistant Secretary for Tax Policy within the
Department----
Mr. Olson. Names, please, sir. Names and positions, please.
That is all I am asking. I worked in the Senate for 8 years. I
know what a filibuster looks like. Please, names and positions.
Please help me. I have a duty to 700,000 people to get these
answers.
Mr. Iwry. Congressman, respectfully I am trying to answer
your question fully. So the position is the Assistant Secretary
for Tax Policy, and that authority is delegated to the
Assistant Secretary by the Secretary of the Treasury. The name
of the individual who is Assistant Secretary for Tax Policy is
Mark Mazur. He is the author of that blog post.
Mr. Olson. OK, got that from Chairman Barton before,
Chairman Emeritus Barton.
One more question, sir. Your lack of details doesn't
support your repeated considerations that you had careful
considerations, your repeated contentions. As you might have
done some research on my life, I am a former Naval--U.S. Naval
aviator. Careful, to me, means knowing that your plane, your
route of flight, and the obstacles en route. If Treasury's
actions were applied to flying aircraft, you would have been on
autopilot, asleep for over 3 years, only waking up when the
collision avoidance system is going pull up, pull up, pull up.
You pulled up, woke up, and avoided crashing the plane.
I will give you one more chance to help me out, sir.
Considering that at least seven components of the Affordable
Care Act, the class act, the 1009, small business changes,
mandate employers, data hub, income verification, employer
insurance verification, have been repealed late in the past 3
years, what is coming in the future? Anything that Treasury is
looking at that I can tell my people back home, get ready for
this?
Mr. Iwry. Congressman, we are continuing to implement the
Affordable Care Act, and we have no specific provision at
Treasury that I am aware of in mind that would call for, in our
view, further transition relief. However, if it does develop
that there is a legitimate need and one that is within our
authority, which we take seriously, sir, and we very much begin
with respect for the law and for the statute that Congress
passed and the language of the statute, but if we need to
exercise the longstanding authority which has been exercised
across different Administrations under the 7805(a) section of
the Tax Code, with respect to another provision of the tax law,
we would do that. There are many examples in the past where
that has been done----
Mr. Murphy. Gentleman's time is expired.
Mr. Olson. My interpretation of your comments, sir, is we
can expect a Labor Day, a Halloween, or Thanksgiving, or
Christmas surprise again. I yield back the balance of my time.
Mr. Murphy. Gentleman's time is expired. Now recognize Mr.
Green of Texas for 5 minutes.
Mr. Green. Thank you, Mr. Chairman. Welcome, Mr. Iwry. The
issue of the delay of the employer mandate, I think, has been
bogged down and whether the Department of Treasury had the
authority to do so. Transitional relief is not objectionable.
Has the authority to provide transition relief been used by
other Administrations in the past?
Mr. Iwry. Congressman, the authority that I have referred
to under Section 7805(a) of the Tax Code to provide
interpretations and in this case, transition relief, with
respect to Tax Code provisions has been used in the past on a
whole number of occasions. Information reporting is a
particular area where transition relief has been found to be
necessary on prior occasions, and the decisions to provide
transition relief on occasion have been made, to my knowledge,
in the exercise of the professional, legal judgment of the
Treasury Department, without regard to political affiliation
across different Administrations. There is a tradition at
Treasury of very professional and serious dedication to the law
and respect for the law and respect for tax policy, and there
is an effort made consistently to keep that up, regardless of
what Administration is in office.
Mr. Green. OK, and so this has been used by other
Administrations----
Mr. Iwry. Correct.
Mr. Green [continuing]. In Department of Treasury and other
Administrations. The bigger issue for me is what the future
holds for the law that is so important to so many Americans. I
know that we are how few people will be affected by this delay,
however, I represent a very urban district in Houston.
Currently our district has the highest percentage of people who
have jobs, but no health insurance, either through their job or
because they make too much to be qualified for Medicaid. And of
course, our State of Texas unfortunately is not expanding
Medicaid. So this delay deals my constituents a hard blow.
The other issue, anyone who is employed and makes between
100 and 130 percent of the federal poverty rate and doesn't
have insurance through their job still cannot afford it because
their employers aren't required to provide it, and they won't
receive the subsidies to purchase coverage through the
exchange. Do you think there is some way that Treasury could
look at that and maybe have a transition so those folks who are
left waiting for that mandate for their employers, is there
some way the Administration can deal with that, to where those
people who are not qualified now because that would be able to
have some type of transition purchase coverage with the
subsidies through the exchange? That may not be your area.
Probably not. Treasury is your jurisdiction, but that is one of
the concerns. What are we going to do with these folks because
of this decision their employers are not covering them? This
delay creates significant uncertainty about the time and the
implementation of the rest of the Affordable Care Act, and I
have a number of questions that should require simply very
short answers. Can you provide the necessary certainty to this
committee, to the employers, and employees that in 2015 the
employer mandate will not be delayed again?
Mr. Iwry. Congressman, this transition relief is a 1-year
grant of transition relief for 2014. There is every intention
to have the implementation of these specific provisions go into
effect at the beginning of 2015 of the expressed terms----
Mr. Green. OK. I only have about 40 seconds. Do you know if
the Treasury is preparing to delay the implementation of any
other provisions of the Affordable Care Act within its
jurisdiction?
Mr. Iwry. Congressman, as I have said, the administrative
authority that we have used to provide transition relief for
these employer provisions is authority that could, in
appropriate cases, potentially be used as it has been in the
past with respect to other provisions, but as we implement--
continue to complete the implementation of the Affordable Care
Act, we don't currently have on our radar screen any particular
provision----
Mr. Green. OK. Well one of my concerns--and I know my
Republican colleagues might not share it, but I think I have
been in every meeting we have had, not only on the committee
but also through the Democratic caucus with Health and Human
Services employees, Administration employees, granted, none
from Treasury, and this was never even came up. Nobody knew
about it until the day before the 4th of July. So I would hope
some of us who really support this law and want it to work,
that we will not give fodder to the folks who don't want it to
work.
Thank you, Mr. Chairman, for your time--the time.
Mr. Murphy. Gentleman's time is expired. Now to the
gentleman from Virginia, Mr. Griffith, for 5 minutes.
Mr. Griffith. Thank you, Mr. Chairman. I appreciate it very
much.
Following up on that, you said that there was nothing on
your radar screen at this time. We have heard the decision or
some kind of decision was made sometime in June, but they
wanted to contemplate it--and I know I may not be using the
exact words you used--and that is why it didn't come out until
July 2. I would ask you, if there is nothing on your radar
screen now, when did this one pop up on your radar screen,
because as Congressman Green said, nobody ever heard anything
about it in numerous hearings or meetings.
Mr. Iwry. Congressman, the requests for transition relief
from plan sponsors, which started the process of thinking about
it, were ones that were made over the course of the past year
or so.
Mr. Griffith. Past year or so, because here is what is
really instructive. On July 1, as a result of part of this
process, the Commonwealth of Virginia shifted its part-time
employees from what they regularly would have to a 29-hour
workweek because of what is going on. I am sure a lot of those
folks would have liked transition relief, and if it has been
talked about for some time, they would have liked to have had
it before the law was changed back during the legislative
session and it went into effect on July 1, your announcement
not coming out until July 2.
Further, I would submit to you that this creates a huge
confusion and area of concern for the American people, because
if something can be, you know percolating out there, there are
all kinds of concerns--we have heard about union concerns and
so forth--for a great deal of time and then all of a sudden it
pops up and a decision is made, you know, late one month and 2
weeks later it is announced. That means anything can happen if
you interpret the code this way before January 1 comes around
or maybe even October 1. Do you believe you have the authority
to delay the implementation of the exchanges? Yes or no?
Mr. Iwry. Congressman, we----
Mr. Griffith. Yes or no. I have got only limited time.
Either you have the authority or you don't. I am not asking you
if you are doing it, I am asking you if you have the authority.
Mr. Iwry. That is--the exchanges are established pursuant
to provisions which are----
Mr. Griffith. Are not part of the Internal Revenue Code,
but you don't have authority.
Mr. Iwry [continuing]. By and large----
Mr. Griffith. Thank you. No answer. You know, that is real
simple. Just no, we don't have that authority.
Mr. Iwry. Congressman----
Mr. Griffith. In regard to that--hang on, I only have
limited amount of time. You talk about this transition relief
and you rely on the Section 7805(a). I have read 7805(a) and
the rest of 7805. I don't see the words transition relief
anywhere in there, and in fact, I would point out to you that
the section deals with regulations predominantly, although it
does reference the Internal Revenue Code on three occasions, it
references regulations 35 times and it is talking about, you
know, delaying a regulation. This is not a regulation. This is
a law that was put into effect by the United States Congress,
and I would ask you, just because other Administrations have
done it--you are a lawyer by training, I believe.
Mr. Iwry. That is correct.
Mr. Griffith. That is correct. Just because other
Administrations have done it doesn't necessarily make it right,
and am I not correct that there has been no court opinion that
has ever said that changing the law by unelected bureaucrats
under that particular code section is, in fact, lawful? I am
correct, there is no court case saying that, yes or no?
Mr. Iwry. Congressman, we have not exercised this authority
because other Administrations have done it. We have exercised
this authority because we believe in good conscience----
Mr. Griffith. This law cannot be enforced the way it was
written. I understand that, but the bottom line I am asking you
is there is no court opinion. You have referenced other
Administrations to say this is where we get our authority from,
but there is no court opinion saying this is a lawful act.
Isn't that correct? Yes or no?
Mr. Iwry. No court opinion addressing this transition--this
branch of transition relief----
Mr. Griffith. Any transition relief granted by this code
section that you are referencing, 7805(a) of the Internal
Revenue Code? I am correct, there is no opinion referencing
that, am I not? No court opinion that says it is lawful, yes or
no? It is real simple. You all are making a huge decision on
the United States of America and you can't answer the question?
It is yes or no. It is simple.
Mr. Iwry. Congressman, there are court opinions referencing
Section 7805(a) of the Internal Revenue Code----
Mr. Griffith. In changing a law passed by Congress? It is
mostly regulation, am I not correct? Is there any case that
references a time when the Treasury Department used this
section to stop the implementation of a section of the law and
a court has said oh yes, you got that authority? Can't cite me
one, can you?
Mr. Iwry. Congressman, we will be happy to respond to you
after the hearing.
Mr. Griffith. And I appreciate that, but I would think if
you were coming to a hearing where you are going to testify
under oath and you are changing the law of the United States of
America by--of the executive and by the administrative branch,
I think you would have your court cases lined up. I don't
believe you got it, but I would be glad to see it if you do.
Thank you. I yield back.
Mr. Murphy. Gentleman's time is expired. Now recognize Mr.
Johnson of Ohio for 5 minutes.
Mr. Johnson. Thank you, Mr. Chairman.
Mr. Iwry, I certainly am not happy that we are here today.
I am sure you are not either. You know, the Administration has
had 3 years to work on this, and it is just now getting worried
about the timeframe. Was there ever a comprehensive plan in
place, or was too much of the 2,000 page healthcare law waiting
to be written into 20,000 pages of regulations that have slowly
leaked out of HHS and the IRS? Because oh, that is right, we
had to pass the bill to find out what was in it. That was what
we all heard. Turns out that deceiving the American people with
a law largely written by bureaucrats after it was already
signed into law wasn't such a good thing for the President
after all. Because now that we have got those 20,000 pages of
regulations, the law supporters are finding out just how
unworkable it is, something that we have been saying all along.
Today, 78 percent of Americans lack awareness about the
law, and four in ten don't even know the law takes effect 5
months from now. We are 3 years in here, folks, and issues like
this are exactly why the Administration should be delaying the
individual mandate, too. And if things have gone the way they
have and are going is any indication of what is to come, this
law will never be workable. So it probably doesn't come as a
surprise to you, but let me ask you once again, does the IRS,
does your department have the authority to delay the individual
mandate? Because I thought I just heard you tell my colleague
on the other side there that after analysis and under certain
circumstances, you do have the authority. That is what you
said, correct?
Mr. Iwry. That is not, Congressman, what I----
Mr. Johnson. No, that is exactly what you said.
Mr. Iwry [continuing]. Was saying with respect to----
Mr. Johnson. No, that is exactly what you said, Mr. Iwry.
You said that under certain conditions, based on the analysis,
that you would be able to apply the same section of the IRS
code to waive this and other future law mandates under that
provision in the IRS code. That is what you said to the
colleague before, so are you now changing that answer?
Mr. Iwry. Congressman----
Mr. Johnson. Do you have the authority? If you were to
conduct the analysis, do you have the authority to change it?
If the analysis were to give you the same level of concern that
the employer mandate did, would you have the authority under
the IRS code to change and give the transition relief?
Mr. Iwry. Congressman, the individual responsibility
provision does not present----
Mr. Johnson. No, I am asking you if you have the authority.
I am not asking you will you; I am not asking you if you have
conducted the analysis. I am asking you if the analysis were
conducted, do you have the authority under the IRS code to
provide that transition relief? That is a yes or no, Mr. Iwry.
Mr. Iwry. Congressman, we have not performed----
Mr. Johnson. I know you haven't. I know you haven't. I am
not asking you have you. You are not answering the question
that I am asking you. You are very calm and poised. You have
been very skilled at this, so I commend you on that. I have
noticed. What is the IRS prepared to do if the analysis were to
indicate the same level of concern over the individual mandate
as the employer mandate? Does the code allow you to use this
provision to delay the individual mandate?
Mr. Iwry. Congressman, it is not based on the level of
concern by stakeholders----
Mr. Johnson. But you just said it was. You said it was in
an earlier statement--you are under oath. Do you remember what
you said about 5 minutes ago, 10 minutes ago?
Mr. Iwry. Respectfully, Congressman, what I am saying is--
--
Mr. Johnson. Well respectfully answer the question. If you
want to be respectful, Mr. Iwry, to the voice of the American
people, then answer the questions that you are being asked and
stop dancing around the issue. Does the IRS have the authority
to delay the individual mandate under the same IRS provision
that they delayed the employer mandate?
Mr. Iwry. Congressman, we have not considered----
Mr. Johnson. You are not going to answer the question.
Mr. Iwry. We have not----
Mr. Johnson. You said earlier in your testimony----
Ms. DeGette. Mr. Chairman, I respectfully ask the witness
be allowed to answer the question.
Mr. Murphy. Gentleman has the time.
Mr. Johnson. This is my time, Mr. Chairman.
You said in your testimony earlier that your decisions were
based on concerns from stakeholders. Who were the stakeholders?
Who did you talk--who did the IRS talk to before they made this
decision?
Mr. Iwry. Congressman, the stakeholders who expressed these
concerns----
Mr. Johnson. Yes, who were they? Specifically, who were
they?
Mr. Iwry [continuing]. Included the National Restaurant
Association, the National Retail Federation, the Retail
Industry Leaders Association, the Employers for Flexibility in
Healthcare.
Mr. Johnson. Did you talk to any individual companies, the
businesses that were going to be impacted?
Mr. Murphy. Gentleman's time is expired.
Mr. Johnson. I thank you, Mr. Chairman. I yield back.
Mr. Murphy. Chair recognizes the gentleman from Missouri,
Mr. Long, for 5 minutes.
Mr. Long. Thank you, Mr. Chairman, and thank you, Mr. Iwry,
for being here today on kind of a hot topic, I think as we all
know.
Mr. Johnson kind of took one of my questions. I guess he is
over here looking at my notes, but these different companies
that you talked to in making this decision or your agency made
in delaying the employer mandate, can you name three companies?
I mean, the top three companies that pop in your head, hey, we
talked to John Deere, we talked to General Motors, we talked to
this one, we talked to that one. Can you name me three
companies just real quickly that you talked to about it?
Mr. Iwry. Congressman, we talked to many and heard from
many company representatives, as well as various individual
companies. What I am----
Mr. Long. That, to me, is the company. If you talked to the
representative, then--you are kind of representing Treasury
here today so I think I am talking to Treasury. So if I was
talking to somebody that represented John Deere, then I would
think I was talking to John Deere, so can you just--three names
that pop in your head of companies that you talked to about
this, how onerous it was going to be on them or why you made
this decision?
Mr. Iwry. I am sorry, Congressman, I wasn't being clear.
What I meant was associations representing hundreds of
companies.
Mr. Long. Right, well you named the National Restaurant,
but that is not what I am looking for. I am looking for KFC. I
am looking for Darden. I look for a lot of restaurants, if you
haven't noticed, but----
Mr. Iwry. Congressman, we spoke to Darden. We have spoken
to the Gap. We have spoken to numerous companies, and I would
be happy to think of them. What I am not coming up with right
now and I would like to do that to be helpful and responsive to
your question, is sorting out my recollection----
Mr. Long. If you can, I would appreciate it.
Mr. Iwry. Yes, sir.
Mr. Long. OK. Let me move on. I will tell you one company.
I heard earlier one of the Congressmen said we each represent
about 700,000 people. I represent, I think, 751,000. We lost a
Congressman due to the Census last time in Missouri, so I have
751,000 constituents. But I don't want to talk about 750,999 of
them, I want to talk about two of them. One of them is an
employer in my area that came to me, the CEO came to me and
said I want to tell you how bad this Affordable Care Act is
going to be on our company. This is a company that started out
with one store in Springfield, Missouri. They now have 56,000
employees. Obviously, they have stores all around the country
now. He said we provide a great healthcare insurance for our
people. They loved it. It was affordable for our company. We
cannot provide that insurance for them next year. The
requirements of the Affordable Care Act are going to be so
onerous on us that we cannot do that. We are going to tell our
part-time employees--and I think they already have, at this
point--that we are not going to provide healthcare for the
part-time employee that they were providing for before, and the
best we can figure, we are going to have to cut people down to
29 hours a week. Well that is not doable. That is not--people
can't go to work somewhere 29 hours a week and then pick up a
few more hours somewhere else. So those are the types of people
that I am concerned about. An employer in my area, again,
started out--the great American success story. Started out with
one company, now they have 56,000 employees. And this bill is
so onerous on them that they cannot provide that coverage.
So you stated earlier that the vast majority already
receive this coverage, because they work for a company like
this that has 56,000, but even when this 1-year mandate runs
out, then they are not going to be able to provide the same
healthcare at the same affordable cost that they are now. So
they can't keep it next year when this runs out.
You said that the White House was involved. Were there any
talks about the individual mandate? I mean, to me, you have
done a good thing. I don't know that it is constitutionally
legal. I can't imagine the President just willy-nilly
arbitrarily saying I am going to change a law because we want
to change the law. I don't know that that is constitutional,
but let's say--let's assume that it is. But I think you have
done a good thing in shutting the barn door before the horse
was out on the mandate on employers. The individual mandate,
that horse is still in the barn. Did you talk about shutting
the door before that horse gets out of the barn? Did you have
those discussions about delaying the individual mandate?
Mr. Iwry. Congressman, we collectively as a lot of people--
I can just speak to you about the discussions I was in, which I
assume is what you are asking me about. But in the discussions
that I have been involved in, which are part of the total
discussions, we did not consider delaying or giving transition
relief with respect to the individual mandate because we did
not identify similar reasons for doing so, a comparable impact.
Mr. Long. OK. So you didn't think that the individuals
would want and need this same relief that the employers would
need, correct?
Mr. Iwry. That is correct, Congressman. I would be happy to
explain why.
Mr. Long. OK. I am about out of time here. For the record,
I just want to state that we do things in Congress--I have a
lot of friends on the other side of the Aisle. I have a few on
this side, but I have a lot of friends that I really, really
try and reach out and get along with people. I am kind of a
people person, and I think that we need to work together. It
just seems like on all of these issues--I don't care what the
topic is--that when we want to do something, the other side is
violently opposed to it, and if they on our side and their
side, too, once in a while could reach out with an olive branch
and say hey, you know, the White House got in on this and we
are not going to do the employer mandate, and we say hey, why
not for the individuals, too? If they would come back and say
that is fine on immigration reform, they want to--they don't
want to touch--we want the borders tightened. We can talk about
immigration and get something done on immigration, but if they
would once in a while come together, I think it would be better
for all of us. Thank you.
Mr. Murphy. Gentleman would have more friends if he sticks
to the time limit. I thank the gentleman. Now turn to the
gentlelady from North Carolina, Ms. Ellmers, for 5 minutes.
Mrs. Ellmers. Thank you, Mr. Chairman.
Mr. Iwry, I have a couple questions for you regarding the
employer mandate. You know, the Affordable Care Act, or
Obamacare, was put in place March 2010, is that correct? Yes or
no?
Mr. Iwry. That is correct, Congresswoman.
Mrs. Ellmers. OK. When was the employer mandate actually
put in place? When was the finalization of the actual language
to what employers would have to adhere to put in place?
Mr. Iwry. The language was part of the law that was enacted
in March.
Mrs. Ellmers. So it was in the initial part of the law back
in 2010. OK. May I remind you it is now July 18, 2013. There
have been businesses across this country and individuals and
American families who have been dreading this terrible piece of
legislation going into place. This is the worst piece of
legislation that has ever affected American families.
Now here we are, July 2, week of 4th of July, and we get
this message put out that we are now going to delay the
employer mandate, the employer mandate forcing businesses to
have to give insurance and incur the cost. What was the tipping
point at this point when we are so close to the implementation
in 2014? What was it? Was it the cost to businesses? Was it the
affordability? Was it the fact that jobs were going to be lost?
Was it going to be the hours? What was it that you heard from
these associations that changed your mind or urged you to make
this decision?
Mr. Iwry. Congresswoman, the associations and the
individual companies----
Mrs. Ellmers. What did they say the issue was?
Mr. Iwry. The associations and the individual companies
said that the issue was two-fold.
Mrs. Ellmers. And it was?
Mr. Iwry. One, that they needed more time to implement the
reporting requirements----
Mrs. Ellmers. OK.
Mr. Iwry [continuing]. But because their systems needed to
be adapted, both for collecting----
Mrs. Ellmers. OK, but this--so when did you start getting
this information? When did you start sitting down with these
associations?
Mr. Iwry. We started sitting down with the associations and
individual businesses shortly after enactment of the law.
Mrs. Ellmers. So that was back in 2010----
Mr. Iwry. 2010 or----
Mrs. Ellmers. And you now, 3 years later, have made this
decision.
Mr. Iwry. Or 2011.
Mrs. Ellmers. OK. Well this is the issue. Do you have a
business background?
Mr. Iwry. Congresswoman, I have spent more years counseling
businesses in the private sector----
Mrs. Ellmers. OK, so you are very familiar with business.
Time is money. When it costs a business to have to adhere to
onerous regulations, that is money. So basically what you are
telling me, yes or no, is that it really boils down to the cost
and the fact that businesses would have to fire employees. Is
that correct?
Mr. Iwry. Congresswoman, that is not how the businesses
that have expressed these concerns that the reporting be----
Mrs. Ellmers. So what is going to change in a year?
Mr. Iwry. Congresswoman, businesses have asked us if we can
simplify or streamline----
Mrs. Ellmers. OK, so you are going to simplify the system.
Three years later--knowing the requirements have always been
there, now 3 years later we are going to simplify. OK, that is
fine. That is fine. I don't have a problem with that. It is
totally inadequate, but I will accept it.
Let me move on to the individual mandate. Now you say that
you don't see any problem with individuals being able to
report?
Mr. Iwry. Congresswoman, the impact of the reporting
conditions----
Mrs. Ellmers. Have you actually reached out to individuals
to get comments, to find out what the individuals feel about
this? Because I have, because I represent 700,000 of them and
they are all very concerned about this. What input have you
received?
Mr. Iwry. The Administration has worked with many
individuals----
Mrs. Ellmers. The Administration or--OK. So what is your
impact? So the individuals you are talking to are saying this
is just perfect, it is wonderful, this is the best thing that
has ever happened?
Mr. Iwry. The individuals process for navigating----
Mrs. Ellmers. OK. Let's just move on, because see,
interestingly enough, HHS put out a 606-page rule now saying
that individuals who are going to the exchanges in the 16
States where they are up and running or will be that they won't
have to report any type of income verification or employer-
based insurance for these exchanges. Now why would that happen
at the same time?
Mr. Iwry. I believe that is not correct, Congresswoman.
Mrs. Ellmers. What is your version, then, and has the
Treasury had any input there?
Mr. Iwry. My understanding from Ms. Tavenner----
Mrs. Ellmers. I have 2 seconds.
Mr. Iwry [continuing]. And from CMS HHS is that that
verification change that they announced in that regulation----
Mrs. Ellmers. Yes.
Mr. Iwry [continuing]. Was much more limited in its
application.
Mrs. Ellmers. Well, 606 pages. However, there is an issue
here because there is no time limit on that. We are not just
giving someone a year to learn how to report; we are just
removing it. Am I not correct in that? We are just now saying
that individuals do not have to report their asset
verification, is that not correct?
Mr. Iwry. That is not my understanding, Congresswoman. I am
not an expert on the HHS requirements, but that is different
from the myths and facts statement that they--that Ms. Tavenner
at CMS posted----
Mrs. Ellmers. Well my time has expired, but I find it
amazingly coincidental. Thank you.
Mr. Murphy. Gentlelady's time is expired. Now turn to the
gentleman from Louisiana, Mr. Scalise, for 5 minutes.
Mr. Scalise. Thank you, Mr. Chairman. I appreciate you
holding this hearing. It is very important that we have this
hearing. Mr. Iwry, I appreciate you being here.
We have had a number of hearings in this committee
exploring the ramifications of the President's healthcare law,
and when we have had Administration officials in the last few
months come and testify, we have been hearing horror stories
from people in our districts. You know, I represent southeast
Louisiana. I hear from businesses all the time that have been
talking about the devastating impacts this is having on their
business, on their ability to hire new employees. Many
businesses are being forced to reduce the number of hours that
employees work because of the healthcare law. In fact, our
State study had just come out that said our State, Louisiana,
would see a 56 percent increase in individual healthcare
premiums on families. Fifty-six percent increase because of the
President's healthcare law, so we are seeing all of this. And
then when we have had hearings with Administration officials,
they have all said everything is going fine. Everything is
looking great. We have recently had hearings where those things
were being said and we present them with this information,
things that we are seeing and hearing on the ground in our
districts back home.
So I think when you come here and say that sometime in June
you all made a decision that you could just ignore part of the
law, there are a lot of real serious questions that come about.
How long have you all known about this? How long has your
agency known about it, and what other agencies within the Obama
Administration have known?
I want to first ask you, when you started coming up with
this understanding as you are meeting with businesses and they
are telling you we have got serious problems, and then
ultimately you decided you think you can delay a part of the
law, did you have any talks with HHS, to have the same
conversation that you all had internally with HHS who was
moving forward with implementation?
Mr. Iwry. There is a lot of coordination between Treasury
and HHS----
Mr. Scalise. On this decision? On the decision to delay the
employer mandate, did you have conversations with HHS about the
decision that you made? It is a yes or no question.
Mr. Iwry. Personally I did not have conversations,
Congressman, with HHS that I can recall before the decision was
made----
Mr. Scalise. How about Mr. Mazur, the person that you said
at Treasury made this decision? Do you know if he had any
conversations with HHS about this?
Mr. Iwry. Congressman, I do not know whether Mr. Mazur----
Mr. Scalise. All right, then let me--he is not here, you
are. I want to ask you, can you get the committee that
information? Can you get the committee the names of anybody at
Treasury that consulted with HHS, if those consultations
happened along the way, that you all were going to delay this
mandate, and when--because they were testifying that everything
was fine, while you all were sitting in a room somewhere behind
closed doors making a decision that it wasn't going fine, so
much so that you thought you can just ignore the law. And so
can you get us that information?
Mr. Iwry. Congressman, does that--does your request
include--so I understand your request----
Mr. Scalise. I am asking you to get the names of people at
Treasury that had any conversations with HHS about the delay of
the employer mandate, and then the dates and times when those
conversations occurred. Can you get that to us? It should be
pretty easy.
Mr. Iwry. The conversations that coordinate between
Treasury and HHS----
Mr. Scalise. Yes. Can you get that?
Mr. Iwry [continuing]. Often go through----
Mr. Scalise. Answers. Can you get us that? The clock is
running. I don't have all day. I appreciate your time and I
hope you respect mine. Can you get us that information?
Mr. Iwry. Congressman, the conversations are coordinated
by----
Mr. Scalise. Can you get us that information?
Mr. Iwry [continuing]. OMB in many cases, or the White
House.
Mr. Scalise. Can you get us that information, yes or no?
Mr. Iwry. We will be happy to--I would be happy to ask the
appropriate people at Treasury to pursue your question and----
Mr. Scalise. And get us that. Because I am looking at the
law here, and this is the law--I was on the committee. I just
got on right when the President's healthcare law was coming
through. We had hearings for months and months, hours and hours
at a time, and I had more concerns about this bill as it was
going through. Every day they were worse. And unfortunately,
they have all come to fruition and then some.
But when I look at the section we are talking about, large
employers, Section 605 says ``large employers required to
report on health insurance coverage effective date, the
amendments made by this section shall apply to periods
beginning after December 31, 2013.'' Now did the President get
out some kind of magical pen and change this to 2014? Did the
President change this law? This is the law right here. You are
talking about something you all did on a blog post in a secret
room behind closed doors. This is the law. Did this law change?
Because yesterday we had a bill on the House Floor to actually
change this law, to delay this by a year. I want to repeal the
whole thing. Every American, the more they see about it--look,
the unions, of all people, the labor unions who actually helped
pass this law--James Hoffa wrote a letter saying ``the law as
it stands will hurt millions of Americans, including the
members of our respective unions,'' and actually went on to say
it would not only harm their hard-earned health benefits, but
destroy the foundation of the 40-hour workweek that is the
backbone of the American middle class. That is the unions who
helped pushed this bill through that are saying that.
And so when the Secretary of HHS is out shaking down
companies recently, trying to get them to give money, companies
she oversees and regulates, I think it is corrupt for her to do
it. She is shaking down companies, trying to get money, to get
them to promote the law. She is going to the NFL and NBA trying
to get them to promote the law, and then somebody else behind
closed doors in the same Obama Administration is saying this
thing is so unworkable we got to delay it.
And so what I am asking you is who is talking to who in the
Obama Administration? It is Sebelius out there on one hand,
shaking down companies, saying help us promote this lemon,
while you all are out there in a room going you know, this
thing is so unworkable we better delay the damn thing. Can you
get us that information, those answers to those questions?
Mr. Iwry. I would be happy to respond now.
Mr. Scalise. The floor is yours.
Mr. Murphy. Gentleman--the time has gone over so I am going
to have to hold to that, but there are some questions we want--
we will submit and you will respond in a timely fashion.
Mr. Scalise. Thank you. I yield back the balance of my
time.
Mr. Murphy. I would now recognize Mr. Gardner from Colorado
for 5 minutes.
Mr. Gardner. Thank you, Mr. Chairman, and thank you, Mr.
Iwry, for your time before this committee.
Just a couple of questions for you. You are the senior
advisor to the Secretary, is that correct?
Mr. Iwry. I am a senior advisor.
Mr. Gardner. A senior advisor, OK. So in terms of the
advice you would give to the Secretary on the question that Mr.
Johnson was asking you, do you have the authority under the
same tax provision to provide a delay in the implementation for
the individual? What would your advice be to the Secretary?
Mr. Iwry. Congressman, I would have to participate with the
appropriate people----
Mr. Gardner. OK.
Mr. Iwry [continuing]. At Treasury.
Mr. Gardner. So your answer is that you would look into it,
and so the answer is not no. You would have the authority to do
that.
Mr. Iwry. Congressman, if that question were asked, I would
have to research or----
Mr. Gardner. And you haven't researched that?
Mr. Iwry [continuing]. Or participate with others or have--
--
Mr. Gardner. Have you researched that point?
Mr. Iwry [continuing]. Others research the question whether
we would have authority to----
Mr. Gardner. Have others researched that point?
Mr. Iwry. Whether we would have authority to----
Mr. Gardner. Correct, under the same provision of law.
Mr. Iwry [continuing]. Provide transition relief with
respect to individual----
Mr. Gardner. To delay the mandate for individuals. Have you
researched it, have others researched it?
Mr. Iwry. We have not researched that particular request--
--
Mr. Gardner. So you delayed the business mandate without
understanding its full implication on what it would mean for
individuals?
Mr. Iwry. Congressman, no, that is not what we did. If I
may explain----
Mr. Gardner. You did--I have some other questions for you.
How many--when was the President made aware of your decision to
delay implementation of the business healthcare rules?
Mr. Iwry. Congressman, may I just finish my response to
your prior question?
Mr. Gardner. If you would like to submit it for the record,
that would be great. When was the President made aware of your
decision to delay the business provisions?
Mr. Iwry. I don't know----
Mr. Gardner. You don't know when the President was made
aware?
Mr. Iwry. I don't know what communications there were with
the President on this matter. I was not involved.
Mr. Gardner. You weren't a part of the decisions to inform
the President of the United States about the decision to delay
what is arguably a major provision of his marquee piece of
legislation?
Mr. Iwry. Congressman, we coordinate with the White House.
The Treasury did coordinate with the White House----
Mr. Gardner. Who spoke to the President about this?
Mr. Iwry. Congressman, I don't know who, whether at the
White House or at Treasury, spoke to the President about this.
If I assume you have--people here have assumed that the
President was told, I don't have----
Mr. Gardner. Would you assume that the President was told?
How are decisions made with this White House?
Mr. Iwry. I would not be surprised at all if the President
was advised of this, Congressman.
Mr. Gardner. Well I wouldn't be surprised either. I would
just like to know when.
Mr. Iwry. I simply have no personal knowledge.
Mr. Gardner. Would you please get back to me on when the
President was made aware of these decisions?
How many IRS agents right now are working with you on
implementation of the healthcare bill?
Mr. Iwry. Congressman, I don't know the exact number as I
sit here of IRS personnel who are working on implementation,
but we would be happy to check on that----
Mr. Gardner. Could you get back and tell me how many IRS
personnel are working on the healthcare bill at this moment?
Would you please get back to me with that number?
Mr. Iwry. We would be happy to--I assume that that is
something that we would be able to do, so----
Mr. Gardner. I will take that last question and if you
could report it for the record, that would be great.
How much money have businesses spent to this point, are you
aware, to try to comply with the healthcare rules?
Mr. Iwry. How much money businesses have spent to date?
Mr. Gardner. Yes, how much does it cost American businesses
to try to comply with the healthcare law?
Mr. Iwry. Congressman, I am not sure I know the--I don't
know the answer to that question.
Mr. Gardner. Could you get back to me with the estimate
that Treasury has and what it will cost American businesses to
comply with the healthcare law?
Mr. Iwry. Congressman, businesses are benefitting as well
from the healthcare provisions----
Mr. Gardner. Do you agree that it costs businesses to fill
out their tax code, fill out their tax forms? It costs
businesses to hire accountants? Do you agree with that?
Mr. Iwry. Congressman, of course.
Mr. Gardner. So it will cost businesses to try to comply
with a new regulation and new law. I would like to know
Treasury's estimation of how much it has cost American
businesses to comply with the healthcare law.
Mr. Iwry. I will be happy to inquire of my colleagues
whether the economists at Treasury have that kind of
information.
Mr. Gardner. Isn't that something the Treasury Department
should have, is how much it is costing the American businesses?
Mr. Iwry. The cost issues with respect to the Affordable
Care Act are certainly something that Treasury has been taking
into account in a very serious way, and weighing them against
the benefit----
Mr. Gardner. Who advises the Treasury Secretary or the
President on how much it will cost to comply with the
regulation?
Mr. Iwry. The Assistant Secretary for Tax Policy is the
individual who would be delegated the authority to make those
regulatory decisions, and therefore if the question was asked
how much does this--would this cost----
Mr. Gardner. Would you mind getting back to me with that
information?
Mr. Iwry. That would be at least one individual within
Treasury, not necessarily the only official within Treasury who
would be responsible for developing that.
Mr. Gardner. I think we would all be interested in that
information. I have other questions for the record. Thank you.
I yield back.
Mr. Murphy. Gentleman yields back. I now recognize the
gentleman from Georgia, Mr. Gingrey--Dr. Gingrey, for 5
minutes.
Mr. Gingrey. I thank the chairman, and I came in a little
bit late, but I am looking at the witness's bio and of course,
in the name tag, Honorable Iwry, Senior Advisor to the
Secretary of the Treasury, Deputy Assistant Secretary for
Retirement and Health Policy of the United States Department of
Treasury. Obviously haven't earned that title of honorary, and
I am just astounded at the lack of ability to answer the
questions, Honorary Iwry.
In your capacity at the Treasury Department, have you heard
either in meetings or by public comments about concerns from
businesses that the employer mandate will cause employers to
reconsider or even halt plans to expand? Have you heard that
concern?
Mr. Iwry. Congressman, we have heard some people express
that concern, as well as many who have said that it would not
have that effect on their businesses.
Mr. Gingrey. Well, I can tell you this, Honorary. I have
certainly heard that concern in my district. When I talk to
small businesses back home in Georgia, I often hear that the
50-employee threshold has repeatedly forced different hiring
practices. I learned that Heatco, a company that specializes in
the design and manufacture of world-class hearing solutions
located in Bartow County, Georgia, has looked into expanding.
The thing is, they currently have, you guessed it, 49
employees, and to expand by adding additional employees will
cost more than automatizing some of their processes due to the
added Obamacare costs. It seems to me that your delay is
directly influenced by examples such as this one, and not due
to the purported reporting requirements, for God's sake, that
have had 3-\1/4\ years to figure that one out.
In your response to the committee, you stated that the
delay occurred after ``having engaged in a dialogue with
stakeholders and reviewing written comments about the employer
and insurer reporting requirements.'' Did any of these comments
mention the effect the mandate could have on their expansion
plans?
Mr. Iwry. Congressman, I am confident that while I can't
recall specifics now, that at least some of those comments
probably did. At least some probably did mention concerns such
as those. Those were not what drove our decision, and indeed,
the concerns that were expressed about the reporting and about
the employer responsibilities were not ones that we gave credit
to automatically or lightly.
Mr. Gingrey. I want to interrupt you just for a second,
because it seems to me you are kind of running out the clock,
and that is--I thought that Harvard-educated lawyers could talk
a little bit faster than Georgians.
But look, would you please tell the committee some of these
employer stakeholders who weighed in? Name two or three.
Mr. Iwry. Well, the Business Roundtable representing
numerous major companies----
Mr. Gingrey. That is a trade association. That is not a
company.
Mr. Iwry [continuing]. Weighed in. Oh, yes, sir. There
were--we would be happy to get back to you with----
Mr. Gingrey. Well, I thank you for that. You should get
back to me. That will be fine.
Now it seems to me that this unconstitutional delay by the
Executive Branch, by this President, was in direct response to
the drag on the economy, higher unemployment, needing more time
to develop reporting requirements was an economic political
decision. I don't deny that or have any particular problem with
that. In that light, though, in that light, would you please
answer the following questions as our distinguished chairman
emeritus, Mr. Dingell, would often say with yes or no answers
regarding the raw Senate politics of this decision that was
dumped on us on the July the 2nd.
Did you hear during the stakeholder process, Honorable
Iwry, did you hear either directly or indirectly from Senator
Mark Pryor?
Mr. Iwry. From Senator----
Mr. Gingrey. Mark Pryor of Arkansas.
Mr. Iwry. I don't recall having heard from Senator Pryor.
Mr. Gingrey. How about Senator Mary Landrieu from
Louisiana?
Mr. Iwry. Congressman, I don't recall having heard from----
Mr. Gingrey. Struggling a little bit, Honorable. How about
Senator Mark Begich from Alaska? How about Senator Kay Hagan
from North Carolina?
Mr. Iwry. Congressman, what I am referring to by
stakeholders are companies, associations of companies, other
organizations in the private sector----
Mr. Gingrey. Yes, what you are referring to as stakeholders
and what I am referring to as stakeholders are two different
animals, and I am trying to ask you if these Senators up for
reelection in 2014 in States that Mitt Romney carried
overwhelmingly came to you, Honorable, and I am sure you were
in the room if they did, if you had heard any concerns that
they have about their reelection potential process in regard to
this bill, which is a train wreck, as retiring Senator Baucus
described to the Secretary of Health and Human Services----
Mr. Murphy. Gentleman's time is expired.
Mr. Iwry. Congressman----
Mr. Murphy. Gentleman's time is expired. Here is how we are
going to handle this in talking with the Minority here. So what
we are going to do is give each side 5 additional minutes to
ask some questions. I have a question or two, and if members
from my side want to ask a question, let me know.
All right, Ms. DeGette, 5 minutes.
Ms. DeGette. Thank you very much, Mr. Chairman.
I really appreciate you coming over here, Mr. Iwry. I know
it is sometimes frustrating and difficult to answer questions
to which you have no answer, but I do think it is important for
us to understand the decision that was made, and also to
understand the scope of Treasury's ability to make these
decisions regarding implementation of the Affordable Care Act.
So thank you for coming. Some of the questions where folks
asked you to submit written responses, you may not be able to
respond to those questions because they were, you know, they
were big, but if that is the case, please let us know that,
too, so that we can help make sure that we get the information
we need.
Mr. Chairman, I just--I think finally Mr. Johnson's
question did get answered and I appreciate my colleague from
Colorado, Mr. Gardner, for getting that answer because I
thought it was very useful about the agency's scope of ability
to be able to delay the individual mandate. And I believe what
you had said, Mr. Iwry, is the agency has not really considered
delaying the individual mandate, and therefore, the agency has
not done an analysis to determine whether or not they do have
that ability under Section 7805(a). Is that correct? Yes or no
would be----
Mr. Iwry. Congresswoman, that is correct.
Ms. DeGette. OK, thank you. I just want to point one last
thing out, Mr. Chairman, which is we keep talking about this
Administration decision to delay the reporting requirements
under Section 7805(a) for the employers, and then we keep
talking about delaying the individual mandate as if it were a
comparable decision, but in fact, it is really apples and
oranges because the employer reporting is simply an IRS
reporting that the employers have to make. And in fact, the
Urban Institute did an analysis--and I will submit this for the
record. They did an analysis after the Administration's
decision figuring out how many more people would be uninsured
if you had the ACA, even without the employer mandate, not just
the 1-year delay, but without it, and it turned out to be very
minimal. The reason is because over 90 percent of Americans who
work for companies already have insurance, and that is not
going to change with just the 1-year delay.
But the Urban Institute analysis also showed, though, if
you delayed the individual mandate by a year, that is a totally
different thing and the reason is the individual mandate
encourages people to go out and buy insurance. It is not simply
a tax reporting, but when they go out and buy this insurance
then, they get the subsidies, they get the tax relief, they get
all of the other benefits that people are going to get. And
what the Urban Institute analysis found out was that if you did
not have the individual mandate, the Affordable Care Act
without the individual mandate, then 13 million people would be
without coverage. So in fact--and you know, it is just two ways
of looking at different sides of the coin is you delay the
business mandate for a year, which is something that all the
businesses sat in this room and said they wanted and everybody
on both sides of the Aisle seemed to think might be a good
idea. You delay that for a year, well swell, but then if you
delay the individual mandate for a year, what will happen is
many, many millions of Americans, people with preexisting
conditions and others, won't be able to get affordable health
insurance through these exchanges.
So I think it is kind of a little different, and I myself
intend to continue to try to help all of my constituents in the
1st Congressional District of Colorado get enrolled so that
they can get these benefits and so that we can bend the cost
curve. And those are my two cents, Mr. Chairman. I would ask
unanimous consent to put this Urban Institute analysis into the
record.
Mr. Murphy. Without objection.
[The information appears at the conclusion of the hearing.]
Ms. DeGette. Thank you very much, Mr. Chairman.
Mr. Murphy. Gentlelady yields back?
Ms. DeGette. I yield back.
Mr. Murphy. Thank you. I am just going to ask a couple
questions here, and then yield to Dr. Burgess.
What are the costs to American businesses of complying with
the reporting requirements? Do you have this number, the cost
to American businesses of complying with the reporting
requirements? I am assuming that is part of the record the
Treasury is considering as a basis for your decision, their
costs.
Mr. Iwry. Mr. Chairman, the fact that there are costs is
certainly something that is relevant.
Mr. Murphy. I know it is relevant. Is it--do we have a
number of how much it is going to cost American businesses to
comply?
Mr. Iwry. I would be happy to take that back and see
whether we----
Mr. Murphy. Is there a memorandum or any other information
that was reviewed by you or other people with regard to the
costs?
Mr. Iwry. Businesses and their representatives provided
information about the fact that it was costly. If I----
Mr. Murphy. So you will provide us with those memorandums
or communications regarding the costs?
Mr. Iwry. I am sorry, sir?
Mr. Murphy. You will provide us with information regarding
the costs?
Mr. Iwry. We will be happy to look back and see whether
they provided information----
Mr. Murphy. It was only a week ago you decided this, so I
was hoping you would remember. It was only 2 weeks ago that you
decided to delay this, so I was hoping you would remember how
much the costs were.
Mr. Iwry. Mr. Chairman, I don't remember a particular
figure that----
Mr. Murphy. Did Treasury do an analysis of the costs?
Mr. Iwry. Treasury considered the cost as part of the
analysis----
Mr. Murphy. And the number is?
Mr. Iwry [continuing]. Taking it into account, but I don't
know whether there is a separate number that was broken out. I
will be happy----
Mr. Murphy. Add that up and please get that to us.
You also mentioned that Treasury carefully considered the
rule. Do you know what other agencies reviewed the announcement
with regard to delay? Did other departments, other than
Treasury, review this before the announcement came out? For
example, did you ask HHS to review?
Mr. Iwry. Mr. Chairman, OMB or other White House offices
coordinate typically between the various departments that are
involved in implementing----
Mr. Murphy. Did you seek review from anyone else? Did
Treasury seek review from any other agencies?
Mr. Iwry. I personally did not, don't recall talking to the
other----
Mr. Murphy. Did you see any memos or hear of any
communications where other people within Treasury were
reviewing this with any other agencies, any other departments?
Mr. Iwry. I do recall discussions in which this was
reviewed by and there were consultations----
Mr. Murphy. Other agencies, other departments?
Mr. Iwry [continuing]. With other organizations within the
government, but I don't recall such with respect to the other
departments, as opposed to OMB or----
Mr. Murphy. Let me broaden that. Any government agency,
entity, department, division, person, desk, cubicle, group
where two or more are gathered, we would like to know, all
right?
Is there any evidence or data before Treasury about the
burdens of costs on the individual? You had mentioned before
that you reviewed this for businesses but not necessarily for
individuals. Did you hear from any individual groups? Did you
seek information or do you plan to seek any information from
individuals with regard to individual concerns and burdens?
Mr. Iwry. I think the Administration has heard from
individuals, Mr. Chairman----
Mr. Murphy. Treasury. I am pausing the clock.
Mr. Iwry. I would have to check. Certainly Treasury has
weighed the impact on----
Mr. Murphy. Let me ask this. If Americans want to let you
know what their concerns are as individuals, what address can
they send their concerns to?
Mr. Iwry. There are----
Mr. Murphy. Just yours. I want them to write to you. Do you
have an address at Department of Treasury?
Mr. Iwry. Mr. Chairman, yes, there are specific addresses
that have been provided for the public.
Mr. Murphy. We are asking you because you are involved with
this decision and implementation, and you said you haven't
heard from individuals. So I would like--if there are some
people that have concerns out there, I would like them to be
able to write to you. So we can have them write to you at
Department of Treasury, care of the Department of Treasury?
Mr. Iwry. Mr. Chairman, I would be happy to hear from them.
Mr. Murphy. Thank you. I am now going to yield to Dr.
Burgess for a question.
Mr. Burgess. Thank you, Mr. Chairman.
Let me just ask, did you get any feedback from the
Department of Health and Human Services as to making this
announcement on July 2?
Mr. Iwry. I don't recall, Mr. Burgess, hearing any feedback
from HHS regarding this July 2 announcement.
Mr. Burgess. Did they provide you an analysis of what this
delay meant?
Mr. Iwry. Whether they provided an analysis to the White
House or to OMB or to someone else at Treasury, some other
office at Treasury, I don't know. I had not--I don't recall
receiving any analysis from HHS.
Mr. Burgess. I just find that extremely odd that a
department that had worked on this so diligently and then you
provide this delay, and there is no consultation.
Did Treasury consult CMS directly on the question of
whether a delay would harm the integrity of the employer
verification system, and shouldn't this question have been
discussed, given that the Exchange Subsidy Program will cost
taxpayers a trillion dollars over the next decade?
Mr. Iwry. Congressman, there are discussions which I am not
privy to between CMS and IRS personnel about verification and
reporting coordination between the marketplaces or exchanges
and the tax system that go on on a, I believe, a continual
basis and I am not involved generally in those conversations,
so I don't know.
Mr. Burgess. Mr. Chairman, it is apparent that the witness
does not want to answer the question. I am going to
respectfully request that this committee follow up with an
aggressive document request from the Department of Treasury and
the Department of Health and Human Services, and I expect a
document request to be fulfilled. I will yield back to the
chairman.
Mr. Murphy. Thank you. We are--our time is expired. I just
want to--with regard to your welcoming comments from individual
citizens across the country, so I am assuming if they write to
you, Mr. Iwry, at Office of the Deputy Assistant Secretary for
Retirement Health Policy at the U.S. Treasury Department,
letters should get to you. Am I correct?
Mr. Iwry. Mr. Chairman, we would be happy to provide an
appropriate address or a recipient for those letters.
Mr. Murphy. Can you tell me--I am just asking your address.
You have got to be able to answer that question. You told us
you haven't heard from people. I am just trying to help
America. I am just trying to clear this up. So is it OK if
people write to you at Deputy Assistant Secretary for
Retirement Health Policy at the U.S. Department of Treasury?
Mr. Iwry. Mr. Chairman, we have heard from individuals, but
on this particular issue----
Mr. Murphy. On this issue. This is what we would like to
know.
Mr. Iwry. I am not aware that whether we have heard from
individuals on this particular issue.
Mr. Murphy. OK, thank you. Well with regard to this, I ask
unanimous consent that the written opening statements of other
members be introduced into the record, and so without
objection, documents will be entered into the record.
And in conclusion, I would like to thank you for being here
today and participating in this hearing. I remind members that
they have 10 business days to submit the questions for the
record. Mr. Iwry, I ask that you respond to them promptly with
answers.
Thank you very much. This hearing is adjourned.
[Whereupon, at 5:03 p.m., the subcommittee was adjourned.]
[Material submitted for inclusion in the record follows:]
Prepared statement of Hon. Gregg Harper
Mister Chairman,
Thank you, Mr. Chairman, for facilitating today's
discussion on two issues that are of major concern to
Mississippians.
Once again, we see that the ``Affordable Care Act'' is
nothing short of politics above economics.
I've argued that this law was bad for employers from the
start. And it seems now that the administration would agree.
But if the federal government is going to exempt billion-dollar
corporations from this burdensome law, why wouldn't we give
average citizens the same relief?
This law is broken. And it can't be fixed by handpicking
some provisions to enforce and others to conveniently ignore.
Let's repeal all of this health care law.
Let's consider fair health care reforms.
And only then will Americans receive the care that they
need, from the doctors that they choose, at a cost that they
can afford.
Thank you, and I yield back.
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