Its Own Weight

When famed economist Herbert Stein philosophized that "If something cannot go on forever, it will stop," he might have well been speaking about the president's health-care law.

Since its passage, Obamacare has creaked and strained under its own weight. Individual parts of the law have begun to fall away bit by bit, first the untenable CLASS Act and then the onerous 1099 provision, while other pieces have barely hung on, as exemplified in the delay of offering options in the SHOP exchanges -- the marketplace where small businesses can purchase insurance products.

Just over two weeks ago, Obamacare's foundation trembled yet again, when the administration announced that it will delay until 2015 the implementation of the employer mandate and reporting requirements.

On its face, this latest delay marginally improves a bad situation: It provides those in the business community with an extra year to comply with a cumbersome and confusing element of the law. But delays are not long-term solutions. They do not solve the inherent problems of the employer mandate, nor do they solve the law's other many problems, which extend far beyond the scope of this single troublesome element.

Millions of self-employed individuals and small-business employees will still be subject to the law's much more expansive individual mandate, which requires nearly all Americans to purchase a health insurance plan or pay a penalty. Individuals and small businesses that provide health insurance must purchase government-sanctioned "essential health benefits" that will be more costly than the health-insurance benefits they currently use.

Beginning in 2014, the health-insurance tax (HIT), another problematic provision of the law that targets the fully insured marketplace, will increase the health-insurance costs of 1.7 million small businesses, 11 million employees, the self-employed who purchase in the individual market, and 23 million employees who are covered by their employers.

The endless stream of delays and capitulations -- not to mention new taxes and complicated regulations -- in Obamacare only add to the sense among many that this law is nothing short of a mess. Members of the small-business community -- the segment of the economy responsible for the majority of job creation and the sector that will be hardest hit by some of Obamacare's most complex provisions -- have little reason to believe in the cost-reduction promises of health-care reform. Since the law was passed, the average reading for the NFIB Small Business Optimism Index has been 91.4 -- almost nine points below the historic average of 100 -- and its current trajectory is flat. In the words of one small-business owner, "uncertainty is the single biggest killer" of confidence among jobs creators -- and this law has dramatically added to small-business owners' uncertainty.

The implementation delay illustrates how deeply flawed the law is -- even the administration needs more time to figure out how to implement it correctly. But delaying implementation is not enough. If the administration is truly listening to small-business owners, it will work toward permanent solutions that provide the long-term certainty that businesses are looking for.

Permanent relief can be achieved by defining a full-time employee as one who works 40 hours a week instead of 30 - the definition included in Obamacare in contradiction to the one codified by decades of labor law. More can be done to help small employers get relief by repealing the HIT -- which is already discouraging business expansion and job creation, and which will increase premiums on the health-insurance plans that self-employed individuals and small businesses purchase. Only this type of relief will encourage business owners to hire additional personnel or give them the confidence to increase working hours for existing employees.

In every way, the law has proven itself unmanageable, unreliable, and unsustainable. But it hasn't stopped yet. Herbert Stein may well be right: If Obamacare cannot continue, it will collapse on its own. But until it does, we need to give job creators the space to do what they do best, by providing relief, reducing confusion, and addressing the most pressing challenges of complying with a complex and cumbersome law.