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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They delay it so Dems can get re-elected...then drop the hammer. Good job!
Obama failed us (again).
CNN NEWS ALERT: Obama ratings are rising.
"Penalties for firms not providing health coverage to employees will now begin in 2015 – after next year’s congressional elections."
Just how stupid do they think we are ?!?!? This is being postponed for two reasons. #1 Because it is such a clusterfudge of a program it is nowhere near ready to handle the mass exodus of employees being dropped from their current insurance plan. #2 The Democrats do NOT want this mess hanging over them during the 2014 elections. It will surely mean a repeat of 2010.
It should be delayed permanently...
Keep the push back coming on this horrible piece of junk.
I grew up in the UK and my father works for the NHS and it doesn't work as everyone seems to think.
I can tell you what to think but I will not. Please America look at it for yourself. Go to the library of congress and lets all start reading what this monster really says.
All this does is gives businesses more time to cut full time employment for part time so they can avoid paying into it. By making "careers" part time only you're going to kill the lower/middle class.
If Obamacare is so good and so great, why are they postponing it? Why not make enable it before congressional elections? Might that make the democratic party lose some seats?
CNN, why are you pretending to take comments on this story? Obviously, because the comments will be anti-Obama.
In Soviet Russia, Care Obama's You!
Dont postpone it, insurance company's profits are at stake.. this isn't a game.
Key word is after the elections, that's all these bums care about
repeal the whole thing, use the money saved to fill the gaps where they are needed, not where they are not needed. Encourage competition in this gargantuan industry, watch how the costs drop. We are on the brink of great technological breakthroughs in medicine, encourage innovation, and entrepreneurship, Drop this stupid busy body, I want to control everthing- socialist garbage – it doesn't works.
Good idea! Make it harder for companies to stay in business, raise the students loan rates and give 7 billion dollars to savage Africa.
Obama has now delayed the looming train wreck until after the 2014 elections. This administration is becoming more disgusting by the minute.
its time for the wealthy to stop being so greedy and compensate their workers. The capitalist system benefits a very few lucky wealthy people and not the majority. Wealthy capitalists should stop being so piggy and help their fellow humans as much as possible.
It's a joke.
YES WE CAN'T!
What if the individual complains? Oh ya that's right Obama only listens to businesses. Got to give them time to get the immigration through so the businesses can get ride of us worker that are required insurance with the new legal aliens that are not required
Little is more evil that the socialist filth known as ObamaKare.
Companies nearing 50 employees would be well advised to form multiple companies supplying services to each other.
Keep the census under 50, and there's no penalty.
Or, they can do what some have recognized, and insurers and other new entities are offering products for – purchase low cost contracts that supply the bare minimum of services yet comply with the law. Some have discovered that what constitutes as "coverage" under the law is not what people expect from their health insurance.
Great news. Now, kill the rest of it.
This all could be avoided with single payer national health care.
What? You mean I have to buy insurance or pay a fine, but McDonald's doesn't? Good grief...
Great so pool shrinks further and even more cost shifted to us who had already been buying insurance. My rates have increased 49% since passage is the "affordable" healthcare act. If anybody needs me I'll be in the corner with my pants down around my ankles waiting for the next rate increase.