That said, delaying the individual mandate in 2014 may have less of a practical effect on the operation of the law than many realize. The reason is that next year, the penalty for non-compliance with the mandate is just $95, or 1 percent of taxable income. So it’s not clear how well it would work as a stick in 2014 anyway. By 2016, it would be $695, or 2.5 percent of taxable income, so eliminating it would have a more significant impact.
But the bigger problem for the administration here may be a legal one. As a number of people have noted, it’s questionable whether the Obama administration had the authority to delay the employer mandate without Congress, because the law says that the mandate “shall apply to months beginning after December 31, 2013.” Administration officials likely assumed they could get away with this unilateral action because it’s unclear who has both the motive and standing to sue.
With regard to the individual mandate, however, the insurance industry could have both. In fact, the insurance industry could sue by largely citing the Obama administration’s own briefs in the health care lawsuits about how essential the individual mandate is to a functioning health insurance market. It would be pretty awkward if Obama’s lawyers had to go back to court, this time to defend the administration’s right to delay the same individual mandate that they spent years fighting for in court.