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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This law is a job killer, as an employer I would seriously consider capping my employee numbers based on the minimum limit to keep below that number. My employee count is not close to. 50 yet, but it could be in the future.
I own 3 businesses in Hawaii since 1987. Hawaii has mandated employers give Health insurance to employees that work 20 hours a week or more.
At first i was angered by the mandate. but 26 years later I am still paying and I am proud that i am able to offer these folks Health Insurance where otherwise could not get nor afford it.
You have to include it when you are marking up your products and or services. But I have happy and healthy employees. As of July 2013, I employ over 200 people, about 50% full time and 50% part time.America will get used to it , and years from now will understand how this is a human and compassionate issue more than a capitalistic one.
What a shocker! This 2000+ page law is so convoluted that it needs to be put out of its misery now. Don't forget that there are thousands of pages more of regulations that were written. Don't forget that hundreds of exemptions for favored businesses and unions were granted. There were no cost control measures embodied in the law. "You'll know what's in it after it has been passed". This is an absolute failure. I could care less what the the Dems and Repub spin doctors say. The American public has been let down by our screwed up partisan congress and President.
I would be willing to bet almost anything that implementation of the ACA will ultimately be delayed until after the 2014 election. They don't want people to see before then what will happen to their insurance premiums with the full implementation.
the Obamacare implosion is beginning
This is terrible piece of legislation infringes on our rights and destroys our health care system in one action. We got the change we asked for but is not what we expected.
As a Small business owner, I've had to cut my staff down to nothing because of the new employer taxes, add on the forcing of us to provide health care will again limit my abilities to hire further. This is getting worse by the second. You do not have my support Mr. O. You are personally killing small business, thank you. I refuse to pay a penny to the insurance world for myself, the costs are out of control and no one seems to care, if we all stop paying, what will they do? Lower the costs!
I would rather see Dingell take over and go back and do what his parents/grandparents tried to do...install a REAL national health plan. Universal single payer.
bring back the public option. lets get this show on the road. they protected (mostly foreign now) physician wages long enough.
so much for the help ...but some of us are paying sky high bills now
Obama wants to limit the damage heading into 2014. What a disastrous president.
Those darn 1%ers! It's all their fault, right Lynda, rs, Dominican, Sniffit, Dutch and Rudy?
This is unworkable and each day it becomes more apparent.
What no more kids to help it move along??? lol .
See Murray Wagner Dingell act. note that ama (protecting physician wages) took out a scare campaign calling it socialism.
After The Elections – who'd a thunk it
Remember it won't cost us a dime. Save us four trillion dollars. Wouldn't be signed unless it's paid for. It will lower our rates by $2500 .
Did I forget any of Obama's lies.
Obama, Reid, and Pelosi couldn't pass a law that this administration could administer. Obama couldn't administer the law that Congress passed.
Obama was either incompetent or incompetent. Take your pick.
most businesses will cap their full time employee roster at 49 and then just hire temps, freelancers, or part timers... which is not going to help employment.
I can't believe McConnell! He's so negative. Oh wait, that was Baucus who is a democrat and worked on the bill...
Well, since the recession and the layoffs and being 60 years old now....I don't have health insurance and won't be able to afford it in the future. Universal healthcare for all is the only answer.
Single Payer = problem solved.
Although there are many benefits to the Affordable Care Act, the requirement that businesses employing 50 or more full-time workers provide their workers with health insurance or face fines, is not one of them. This requirement will turn many full-time positions into part-time ones.
Instead of delaying it one year, simply delete it. It will only hurt American workers.
Just so we understand, the executive branch can pick and choose when to actually implement and enforce laws as it sees fit. I missed that part of the Constitution... And just in time for midterm elections! Coincidence?
Why, this wouldn't have anything to do with the 2014 elections now, would it?
Only reason this is being delayed is because of the election.
They delayed it for the mid-term elections, obviously. The mandate is going to completely destroy all small businesses and we'll be back up to 10% unemployment in no time. Not sure why the dems want to sacrifice their mid-terms for a Presidential race, though.