[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 _____ U.S. GOVERNMENT PRINTING OFFICE 86-396 WASHINGTON : 2014 ----------------------------------------------------------------------- For sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; DC area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC, Washington, DC 20402-0001 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. ---------- [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]