Over the past few years, the Patient Protection and AffordableCare Act has had no shortage of scrutiny. But the employer mandate,perhaps more than any other provision, has become a lightning rodfor criticism. The provision–once thought of as a key, if notessential, part of PPACA–since its inception has been vehementlyattacked by employer groups and business owners. Originallyscheduled to go into effect this year, the mandate has twice beendelayed by the administration, who say they need more time toimplement the provision.

Under the latest delay, announced in February of this year,employers with between 50 and 99 employees have until January 2016to offer health insurance or pay a fine, and employers with morethan 100 employees must offer insurance or pay a fine of $2,000 perworker by January 2015. Companies with fewer than 50 employees areexempt.

Buzz about the mandate hit a new high at the Benefits SellingExpo back in April, when Robert Gibbs predicted during a keynoteaddress that the mandate would never come to pass.

“I don't think the employer mandate will go into effect. It's asmall part of the law. I think it will be one of the first thingsto go,” he said to a notably surprised audience.

Gibbs, a former longtime advisor to President Barack Obama,noted there aren't many employers who fall into the mandate window.He said the delays point to the fact that the mandate “will neverhappen.”

Media outlets quickly ran with the news, prompting the WhiteHouse to respond.

House Minority Leader Nancy Pelosi, D-Calif., maintained thatPPACA's employer mandate will—and must—remain part of the law.

Appearing on CNN's “State of the Union,” Pelosi said that the“employer mandate, the individual mandate, are an integral part” ofPPACA, “This is an initiative that has strong pillars in it thatrelate to each other.”

Even if it's nothing more than political fodder over the oftencontroversial law, the latest debate raises the question: WillPPACA's employer mandate really go into effect? And perhaps moreimportantly, does it even matter?

Mandate doesn't matter

Experts at the Urban Institute researched this very idea. Theiroverall consensus? Eliminating the mandate “certainly wouldn'tspell disaster.”

Overall, the Washington, D.C., based think tank said,eliminating the mandate would have little effect onemployer-sponsored coverage, would “remove labor marketdistortions” in the law, and might even curb some of the politicalopposition.

First of all, it would “scarcely affect the total number ofAmericans who have coverage.” Even without the mandate, 250.9million people will have coverage, compared to 251.1 million—only200,000 more—if the mandate remains intact, researchers said.

“So many people have coverage through their employer now, and noone is requiring them to,” says Linda Blumberg, a health economistand senior fellow at The Urban Institute. “But there are stillincentives for [employers] to do it. It's a way for them to retainand attract the kinds of workers they want. What we did [in ourreport] was analyze the tradeoff—firm by firm, worker by worker—andlook at how employers make these decisions. And for most of them,they will continue to do this to keep employees happy.”

Frankly, Blumberg says, the employer mandate isn't central toPPACA's overarching goals.

“The employer mandate isn't what's driving the increase ofhealth insurance coverage; the individual mandate is,” she says.“And also the subsidies. You don't want to think about the employerand the individual mandate in the same breath. They are verydifferent. One is really essential to it achieving its goal, andone really isn't.”

Another advantage to eliminating the employer mandate is simplyto please employers. Groups such as the U.S. Chamber of Commerceand the National Retail Federation have been asking for the mandateto be repealed all along. They've argued over detrimental effects:that numerous companies would downsize or cut hours for theiremployees to dodge the rule. So not only will killing the mandateallay those concerns, but, Blumberg says, it could get employers tofocus on more important issues—and potentially get them on boardwith supporting the controversial law.

By taking away those requirements for employers, Blumberg says,“you lessen, significantly, the political resistance to the lawfrom employers.”

“If we could get employers more involved with making sure thatthe workers have coverage, instead of them worrying about how toavoid [the mandate] or being angry about a requirement that mightnot even affect them, this could be more successful,” she says.“You take away that friction that the employer community has felt,and I think that's an advantage for broad-based implementation ofthe law.”

The mandate matters

Still, there are reasons to be cautious about repealing themandate. One significant one is funding.

Eliminating the government's take from employer penalties andgovernment subsidies for employees left uncovered would open up agiant hole in PPACA's financing. The Congressional Budget Officehas estimated that the mandate's repeal would leave a gap of $140billion through 2023, while the Urban Institute places it lower, atabout $46 billion.

“What we found was smaller than what the CBO estimated, butstill, penalties make the revenue,” Blumberg says. “That helpssupport the cost of the program. I would expect it would have to bereplaced by another revenue source.”

Of course, there is the issue of what's best for employees andemployers. Without the requirement of offering employees coverage,will employers simply dump their employees onto the exchanges?That's the fear—one that's been supported by various studies andreports.

The CBO has predicted that as many as 1 million more people maybe uninsured in the absence of the employer mandate, though othersargue the number will be much smaller. And those dropped fromemployer-sponsored coverage would likely face paying more forcoverage on the exchanges, some argue.

Tim Jost, a professor at Washington and Lee Law School whosupports the law, outlined some issues in a post in HealthAffairs.

“The end of the employer mandate, and the reporting requirementsthat accompany it, would also make the exchanges' job ofdetermining eligibility for premium tax credits and for exemptionsfrom the individual mandate more difficult,” Jost said.“Eligibility for tax credits and for the individual mandateexemption turns on employee coverage offers and enrollment. Ifemployer reporting were eliminated together with the mandate,precise verification of whether an employee is eligible forcoverage and the extent and cost of that coverage might not bepossible.”

Killing the mandate, too, many industry insiders say, wouldn'tquell political wrangling. Killing it may bring up legalquestions—the government could face lawsuits over not implementingthe law, for example, and some might see it as an admission fromthe administration that Obamacare is failing. Democrats may sufferin the next election cycle. PPACA opponents may call for morerepeals in the law. Arguments are endless.

Other options

Of course, because of the revenue hole, there needs to be analternative if the employer mandate is repealed.

Jost suggested one way: to not just repeal the mandate, butreplace it—by requiring employers to spend a certain percentage oftheir payroll on health benefits. He noted that the House passed asimilar version of the employer mandate in 2009.

“The House bill required all employers to spend at least 8percent of payroll on health benefits,” Jost wrote for HealthAffairs. “Small employers were required to pay a smaller percentageof payroll, which rose as total payroll increased. Employers whospent less than the minimum paid the difference between what theyactually spent and 8 percent of payroll to the federal treasury asa tax.”

The new version of the mandate, Jost said, would “dramatically”reduce the complexity of the current approach.

Looking forward

Whatever the decision, industry folks want to know it—andsoon.

Delaying the mandate—though praised by some—has caused moreanxiety in the community, because no one knows when, or if, therequirement will really go into effect. And the mandate, whether inplace or not, can have an effect on future premiums under thelaw.

“There's a real fear, there's a lack of understanding andthere's confusion—it's a complicated law,” Blumberg says. “You takea complicated law and you layer on top of it delays andimplementing pieces of it—it creates more confusion and angst.”

Glenn Dunehew, director of health and benefits at the BarrowGroup in Atlanta, agrees.

“We need to know, now, that the law is either going to beimplemented or postponed,” he says. “The longer that theadministration waits on starting it, the more money it costscompanies and brokers.”