Updated at 11:00 p.m. ET on Tuesday, July 2
Washington (CNN) - The requirement that businesses provide their workers with health insurance or face fines – a key provision contained in President Barack Obama's sweeping health care law – will be delayed by one year, the Treasury Department said Tuesday.
The postponement came after business owners expressed concerns about the complexity of the law’s reporting requirements, the agency said in its announcement. Under the Affordable Care Act, businesses employing 50 or more full-time workers that don't provide them health insurance will be penalized.
"We recognize that the vast majority of businesses that will need to do this reporting already provide health insurance to their workers, and we want to make sure it is easy for others to do so. We have listened to your feedback. And we are taking action," Mark J. Mazur, assistant secretary for tax policy, wrote in a post on the website of the Treasury Department, which is tasked with implementing the employer mandate.
Mazur said the extra year before the requirement goes into effect will allow the government time to assess ways to simplify the reporting process for businesses. Penalties for firms not providing health coverage to employees will now begin in 2015 – after next year’s congressional elections.
The new delay will not affect other aspects of the health law, including the establishment of exchanges in states for low-income Americans to obtain health insurance.
Supporters of the employer mandate note that most firms already provide health insurance to full time workers, and downplay the effect the requirement would have on small businesses, citing figures showing the vast majority of small businesses employ fewer than 50 workers.
But opponents claim the employer mandate is a potential job killer, saying businesses near the 50-worker cutoff will be unlikely to ramp up hiring if it means they're required to provide employees health insurance.
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“The administration has finally recognized the obvious – employers need more time and clarification of the rules of the road before implementing the employer mandate,” said Randy Johnson, a vice president at the U.S. Chamber of Commerce, a business group.
Obama's administration has previously expressed openness to making the health care law easier to implement, and acted to shorten applications for health insurance on government-run exchanges from 21 pages to three.
On Tuesday, Obama’s senior adviser Valerie Jarrett – who acts as the White House’s liaison to big business – wrote the new delay was indicative of the administration’s determination to implement the health care law effectively and fairly, and that it wouldn’t affect other aspects of Obamacare.
“While major portions of the law have yet to be implemented, it’s already a little more affordable for businesses to offer quality health coverage to their employees,” Jarrett wrote, adding later: “As we implement this law, we have and will continue to make changes as needed. In our ongoing discussions with businesses we have heard that you need the time to get this right.”
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Yet many Republicans – and even some Democrats - have continued to express serious concerns about the roll-out of Obamacare. On Tuesday, GOP lawmakers said the delay of the employer mandate didn’t go far enough.
“This announcement means even the Obama administration knows the 'train wreck' will only get worse,” House Speaker John Boehner wrote.
"Obamacare costs too much and it isn’t working the way the administration promised,” Sen. Mitch McConnell, the Senate Minority Leader, wrote in response to the decision, adding: “The fact remains that Obamacare needs to be repealed and replaced with common-sense reforms that actually lower costs for Americans."
Rep. Eric Cantor, the House Majority Leader, was more succinct. "The best delay for ObamaCare is a permanent one," he wrote on Twitter.
Many allies of Obama, including major labor unions, did not immediately weigh in on the delay. A spokesman for Senate Majority Leader Harry Reid said in response to the decision, "Flexibility is a good thing."
"Both the administration and Senate Democrats have shown – and continue to show – a willingness to be flexible and work with all interested parties to make sure that implementation of the Affordable Care Act is as beneficial as possible to all involved. It is better to do this right than fast," Adam Jentleson continued.
Yet even some Democrats have voiced concern about the roll-out of the health law – Sen. Max Baucus, a key Democrat who helped craft the legislation, expressed serious anxiety in April about its implementation.
"The administration's public information campaign on the benefits of the Affordable Care Act deserves a failing grade. You need to fix this," Baucus told Health and Human Services Secretary Kathleen Sebelius at a hearing.
"I just see a huge train wreck coming down," he added later.
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The GOP is the train wreck, just stop!!! Obamacare is law, we want it and cannot wait sign-up.
Apparently, they still haven't found time to read it to know what's in it now that it's passed into law...
Thanks Nancy...you're a peach.
Sure, wait until after midterms to bring the pain. How politically savvy of you Obama administration.
Sure would have been nice for the entire congress to read the law before enacting it, working out these types of things and then passing the law. What a clown outfit.
It has begun. Not even fully implemented and already delaying deadlines because businesses can't handle it. Ah, the joys of bureaucracy.
Obama doesn't want the economy to crater right before the elections.
If the dems retake the house it will be a repeat of 2007-2011.
I thought Obamacare was supposed to give everyone free healthcare? Why do employers still have to give insurance?
Business wins again.
Smart move. Delay the train wreck until after the 2014 elections.
“He said the extra year before the requirement goes into effect will allow the government to assess ways to simplify the reporting process for businesses.”
This will go over about as big as simplifying the IRS codes.
He knows Obamacare is a complete disaster.
Convenient. Delay it until after the midterm elections. They know this is a train wreck.
I can help with the simplification of the ACA. Get rid of the entire law and start again from scratch.
hurry up. I need health care.
Not a train wreck as long as a good plan is in place. Lower healthcare cost is important. This needs to be done.
They don't want to lose seats when you lose your insurance or your full time job becomes part time due to the Obamacrats.
Disappointed that this happened. Does this mean the penalty for not carrying heatlh insurance will also be delayed?
The Democrats are just trying to set the stage for 2014. By allowing businesses another year, the unemployment rate will look better for the 2014 elections. They figure that is the only way they can keep the Senate, and possible take control of the House. Then watch out!
Lovely, another year of people needlessly dying so some middle man bankster can profit off our tax dollars.
Sure would have been nice for the entire congress to read the law before enacting it, working out these types of things and then passing the law.
Just kill the entire thing already
Good, I have 12 more months until I move my company overseas. Almost pulled the trigger on space yesterday.
Do we citizens get a year delay on the individual mandate as well?
Everything by this administration is calculated. The dems know that if this disaster is put on us right before the midterm election then they will lose control of the senate, as well as more of the house.
I imagine the 2014 election had something to do with this decision.