Business Ethos Blog

Isn’t the Law, the Law?

Dr. David Mielke is the Retired Dean of the College of Business at Eastern Michigan University


Dr. David Mielke


According to the U.S. Constitution the executive branch government has the responsibility to implement and enforce the law—at least that is what I thought until recently.  The Affordable Care Act, Obamacare, was passed to be implemented by January 1, 2014.  The insurance exchanges are to be operational by October 1, 2013.  However, what we have seen in the past month or so has been a number of changes in the law orchestrated by the White House without new legislation passed by Congress.  On what basis have these changes been made and are they the “Right Thing to do?”  Let’s look at some of the issues:

1. Article II, section 3 of the Constitution states that the President “shall take Care that the Laws be Faithfully executed.”  This is a duty, not a discretionary power.  While the President does have the substantial discretion about how to enforce the law, he has no discretion about whether to do it.

2. The first move was to suspend the employer mandate of the Affordable Care Act from January 1, 2014 to January 1, 2015.  This section required employers to provide health insurance to workers if they had 50 or more employees.  There was considerable concern with this provision because it included part-time workers who work 30 hours or more.  We have already read of employers cutting hours to part-time workers to below 30 hours and trying to maintain a work force of no more than 49 workers to avoid having to provide health care insurance.  While this may be good news to employers, it raises grave concerns about the role of the executive branch.

3. The Obama administration rolled back another key health care rule, delaying the requirement that verifies the income levels of those individuals who will seek taxpayer subsidies to help pay or reimburse them for health care premiums.  The health care law requires all individuals to have health insurance by January 1, 2014 or pay a penalty.  To help low income people to pay for the insurance a system of tax credits based on income will be available.  The IRS was to integrate income information with individual applications to verify incomes.  The IRS is unable to get this done in time, so the change will allow individuals to self report income to get the subsidies.  Can you imagine the number of errors and fraud that will result?

4. Next came another delay–the one that would cap out of pocket health care costs to consumers.  The report has come out that the administration is giving some insurers and employers a one year grace period to adhere to the legal limit which otherwise would have been capped individual costs at $6,350 a year.  This is now delayed until January 1, 2015.  That is bad news for consumers who may now have employer or self insurance with higher out of pocket expenses or no limit at all.  Insurance companies and employers may be pleased, because premiums will be lower, but this is not good news for consumers.

5. The next change is to give Congress and their staff an exemption from Obamacare.  Iowa Senator Chuck Grassley proposed and the idea passed that requires members of Congress and their staffs participate in the insurance exchanges, in order to get first hand experience with what they imposed on their constituents–or what you might say, “what is good enough for thee, is good enough for me.”  Because of the high salaries, 11,000 members of Congress and their staffs are not eligible for tax credits and they will lose their generous Federal Employees Health Benefits Program which has 75% paid by the government.  That means they could be exposed to thousands of dollars a year in out of pocket insurance costs.  Because of the outcry in Congress, President Obama suspended that part of the law and the Office of Personnel Management will work on regulations to provide extra payments to Congress and their staffs based on their existing insurance plan to cover Obamacare costs.  It is unclear if they will cut checks or make payments directly, but either way it provides a two tier system, one for the rank and file citizens and one for the politically connected.  Legally, any additional compensation or payments has to be approved through a Congressional appropriation.


The changes that have been made may temporarily benefit employers, insurance companies and Congress, but there is no relief for the average citizen.  The Affordable Care Act contains no provision allowing the President to suspend, delay or repeal it.  Yet, we have 4 major changes that he has mandated without the authority to do so.  It is “Not the Right Thing to do.”  I thought the “Law was the Law.”