Right-Wing Media Revive Myth That Health Care Waivers Are Political Favors

Following the announcement that additional companies have received waivers from one provision of the health care reform law, right-wing media have claimed that the Obama administration is granting the waivers as political favors. In fact, many of the waivers, which are temporary, have been given to companies in industries that opposed the law.

Media Conservatives Repeat Allegation That Waivers Involve Preferential Treatment

Doocy Forwards Falsehood That Obama Administration Is Issuing Waivers “As Little Favors To Friends Of The Democrats.” Fox & Friends co-host Steve Doocy said:

DOOCY: There are a number of provisions of the health care bill obligating employers to cover their employees, otherwise somebody's going to wind up getting fined. Unless you apply to the government and you get a health care waiver. Well, that's kind of embarrassing.

Republicans that say this administration's handing out these waivers as little favors to friends of the Democrats and stuff like that. Well, we've just discovered that apparently the number of waivers has skyrocketed in the last month. [Fox News, Fox & Friends, 1/27/11]

Hoft: “Scandal: Obamacare Waivers Jump From 229 to 729 Covering 2.2 Million Employee.” From a post on Jim Hoft's Gateway Pundit blog, headlined “Scandal: Obamacare Waivers Jump From 229 to 729 Covering 2.2 Million Employees”:

The bottom line is that democrats did not create a law that benefits all of us. And, now they can pick the winners and losers -- who will have to follow their new law and who will get a pass.


But, it's worse than we thought. The Obamacare waivers jumped from 229 to 729 this month covering over 2.2 million employees. At least three SEIU Chapters, including one in Chicago, are included on the list. [Gateway Pundit, 1/27/11]

Malkin Emphasizes Union Plans That Received Waivers. Michelle Malkin wrote:

While the Democrats continued to extol Obamacare and the president defended the behemoth law during the Date of the Union, HHS was quietly presiding over a massive Obamacare Waiver-mania explosion.

When last we examined the growing list, privileged escapees topped 222.

Now: The list now at 729 -- plus 4 states (Massachusetts, New Jersey, Ohio, and Tennessee).

Among the many new union refugees are 4 new SEIU locals.


This is in addition to the three other previous SEIU waiver winners: Local 25 SEIU in Chicago with 31,000 enrollees; Local 1199 SEIU Greater New York Benefit Fund with 4,544 enrollees; and SEIU Local 1 Cleveland Welfare Fund with 520 enrollees.

Which brings the total number of Obamacare-promoting SEIU Obamacare escapees to an estimated 45,000 workers represented by seven SEIU locals. [MichelleMalkin.com, 1/26/11 (emphasis in original)]

Waivers Are Temporary, And Companies In Industries That Opposed Law Have Received Them

FactCheck: Companies From Industries That Opposed Health Care Reform Have Been Granted Waivers. From FactCheck.org:

[A]s of Dec. 3, the federal government had approved a total of 222 one-year waivers that allow the insurance plans at companies like McDonald's, Jack in the Box and Ruby Tuesday, and unions, to ignore the requirement on annual limits. Far from being “Obama's buddies,” as the Internet post claimed, the restaurant industry, through the National Restaurant Association, opposed the legislation. [FactCheck.org, 12/7/10]

FactCheck: Waivers “Merely Give Companies A Temporary Delay Before Being Required To Improve The Coverage Of Cheap, Bare-Bones Plans They Currently Offer.” From FactCheck:

We've received several questions about whether businesses have been able to opt out of the new health care law. The companies haven't been granted permission to ignore the entire law, as the Facebook post quoted by our reader might suggest -- but many have been given one-year waivers to delay compliance with a key insurance mandate that was put into place this fall. The White House says it instituted the waiver process to enable those companies to continue to provide limited-benefits plans -- cheap, bare-bones policies called mini-med plans -- until the law is fully implemented in 2014.


The new health care law aims to eliminate low annual coverage caps like those over time, and this is where the waiver issue has come in. The law says that annual coverage limits can't be set lower than $750,000 for new policy years starting between Sept. 23, 2010 and Sept. 23, 2011. That cap will be raised each year until 2014, when the law will require companies to have no annual spending limits on most benefits in health care plans.


The companies that have been approved for the waivers must reapply for them next year. Waivers are available until 2014. [FactCheck.org, 12/7/10]

Obama Official: "[W]aivers Only Apply To One Provision Of The Law," And “Companies And Employers That Receive Waivers Must Comply With All Other Parts” Of The Law. In a blog post titled “The Truth About Health Care Waivers,” Obama administration official Stephanie Cutter wrote:

To ensure that we protect the coverage that these workers have today until better options are available for them in 2014, the law allows HHS, in extreme cases, to issue temporary waivers from the phase out of annual limits. There are some important facts to remember about these temporary waivers:

  • The waivers only apply to one provision of the law - the provisions phasing out annual limits. Insurance companies and employers that receive waivers must comply with all other parts of the Affordable Care Act.
  • The waivers last one year. Insurance companies must reapply for the waivers each year between now and 2014 when annual limits on coverage will be completely prohibited and individuals will have more affordable and better private insurance choices in the competitive Exchange markets.
  • All employers and insurers that offer mini-med plans may apply for a waiver if they demonstrate that there will be large increases in premiums or a significant decrease in access to coverage without a waiver. You can read a list of employers and insurers that have received waivers here. [The White House Blog, 12/10/10]

HHS: Waiver Applicants Must Certify That Waiver Is Necessary To Prevent Reduced Access To Coverage Or Large Premium Increases. From the Department of Health and Human Services website:

The Affordable Care Act is designed to provide Americans with affordable, high-quality coverage options -- while ensuring that those who like their current coverage can keep it. Unfortunately, today, limited benefit plans, or “mini-med” plans are often the only type of insurance offered to some workers. In 2014, the Affordable Care Act will end mini-med plans when Americans will have better access to affordable, comprehensive health insurance plans that cannot use high deductibles or annual limits to limit benefits. In the meantime, the law requires insurers to phase out the use of annual dollar limits on benefits. In 2011, most plans can impose an annual limit of no less than $750,000.

Mini-med plans have lower limits than allowed under the Affordable Care Act. While mini-med plans do not provide security in the event of serious illness or accident, they are unfortunately the only option that some employers offer. In order to protect coverage for these workers, the Affordable Care Act allows these plans to apply for temporary waivers from rules restricting the size of annual limits to some group health plans and health insurance issuers.

Waivers only last for one year and are only available if the plan certifies that a waiver is necessary to prevent either a large increase in premiums or a significant decrease in access to coverage. In addition, enrollees must be informed that their plan does not meet the requirements of the Affordable Care Act. No other provision of the Affordable Care Act is affected by these waivers: they only apply to the annual limit policy. [HHS.gov, accessed 1/27/11]

Hoft Falsely Claims Small Businesses Cannot Receive Waivers

Hoft: "[I]f You're A Small Business ... You Can't Get A Waiver For Your Company From Team Obama." From Gateway Pundit:

Unfortunately, if you're a small business or you don't have the right connections you can't get a waiver for your company from Team Obama. The bottom line is that democrats did not create a law that benefits all of us. And, now they can pick the winners and losers -- who will have to follow their new law and who will get a pass. [Gateway Pundit, 1/27/11]

Vast Majority Of Small Businesses Are Exempt From New Requirements; Many Are Eligible For Tax Credits

HealthCare.gov: Health Care Reform Law “Specifically Exempts All Firms That Have Fewer Than 50 Employees.” From the HealthCare.gov site:

The law specifically exempts all firms that have fewer than 50 employees -- 96 percent of all firms in the United States or 5.8 million out of 6 million total firms -- from any employer responsibility requirements. These 5.8 million firms employ nearly 34 million workers. More than 96 percent of firms with 50 or more employees already offer health insurance to their workers. Less than 0.2 percent of all firms (about 10,000 out of 6 million) may face employer responsibility requirements. [HealthCare.gov, accessed 1/27/11]

IRS: Small-Business Tax Credit In Law “Helps Small Businesses And Small Tax-Exempt Organizations Afford The Cost Of Covering Their Employees.” From IRS.gov:

The small business health care tax credit helps small businesses and small tax-exempt organizations afford the cost of covering their employees.

Received a Postcard from the IRS?

Millions of small employers received postcards from the IRS beginning in April [2010] that alerted them to the new small business health care tax credit and encouraged them to check their eligibility. Even if you didn't receive a postcard, your business still may be eligible. Read more about this effort.

Eligibility Rules

  • Providing health care coverage. A qualifying employer must cover at least 50 percent of the cost of health care coverage for some of its workers based on the single rate.
  • Firm size. A qualifying employer must have less than the equivalent of 25 full-time workers (for example, an employer with fewer than 50 half-time workers may be eligible).
  • Average annual wage. A qualifying employer must pay average annual wages below $50,000.
  • Both taxable (for profit) and tax-exempt firms qualify.

Amount of Credit

  • Maximum Amount. The credit is worth up to 35 percent of a small business' premium costs in 2010 (25% for tax-exempt employers). On Jan. 1, 2014, this rate increases to 50 percent (35 percent for tax-exempt employers).
  • Phase-out. The credit phases out gradually for firms with average wages between $25,000 and $50,000 and for firms with the equivalent of between 10 and 25 full-time workers. [IRS.gov, accessed 1/27/11]