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 train wreck is happening!
The bill is crap always has been and always will be.
Guess Nancy still hasn't read it yet like most people on the Hill.
Big Business wields its clout.....and once again, government rolls over and presents its hindquarters in submission.
So companies with over 50 employees won't be fined $2,000 per employee, which is less than an insurance policy costs, allowing "Big Business" to stay where they are, drop their current employees insurance, or self insure; while those with less than 50, who everybody says are the firms that do the majority of hiring to providing more needed jobs, either hire to go over 50 or pay $2,000 per employee which for many small firms is the least costly, and they can tell the employees to go to the Health Insurance Exchanges?
Or they can always just pay a fine if they get real sick and use emergency care offices and pay cash.
With Medicare adding 4 million a year and 30 million coming in by Medicaid, where will they get all the physicians and Nurses?
Maybe nobody will have to pay.
Train wreck is putting it mildly. I met with a client today who is an accountant, he's telling his clients to stop coverage, throw their employees into the Marketplace and pay the fine. It's cheaper and you don't have to worry about compliance.
The plastic smiles on everyone in the picture turns my stomach. We can only hope that the 2014 elections will turn the tide and Obamacare will be declared null and void as it should be.
This thing will still be a poop sandwich a year later. Take the Band-Aide off slow or fast. I feel this is the last clog in the toilet to the corporate world moving forward faster. The Obama Clog.
This is all about the Dems getting past the 2014 primaries, nothing more.
Strange that CNN is not running this as a regular story instead of a Ticker story.
What a shock that republicans think this is a "train wreck" – since they tried to block it 41 times already in Congress.
Hospitals are running from Obama care!
Insurance companies are running from Obama care.
Employers are running from Obama care.
A year of collusion by the liberal faithful in congress down the drain.
Why not just get rid of Obamacare all together? The name alone give me the hibbie jibbies.
Next up. Repealbthe commie law.
Embarrassment. So I as a taxpayer should continue to pick up what multi-dollar companies won't?
I trust mr.Obama that he's doing the best he could for the betterment of this country. Also he is the best man for the job.
This is the funniest thing I've read all day. Postponing the pain until after the election.
Oh and I am sure it doesn't have anything to do with election year either .............
very disappointed to see the postponement
Why on earth would he want to delay giving us access to his signature legislation? Oh...a mid-term election. And you people thought Bush was a crook?
Our president sold out to the companies once again. I guess the middle class has no chance to survive.
If the bill got passed before anyone read it, shouldn't it be enacted before any understands it.
Regressives hate and fear Obamacare because they know it will work.
Postponed until just after WHEN?!
“The administration has finally recognized the obvious – employers need more time and clarification of the rules of the road before implementing the employer mandate" more like the administration has finally recognized the obvious – employers think this is a crock along with about 90% of the country!
The democrats are going to postpone until after the 2014 election and then slam businesses. Nice going Obama!