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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I'm very against this delay. WE voted for this plan, let it happen!!!!
until after the 2014 elections, yes, we got it...
This bill has been a joke since it's beginning. You can blame the Republicans all you want, but it was poorly put together and poorly executed. How many exemptions for administration cronies or postponements of provision because they're too complicated have already been granted? There was a better way, but the Democrats didn't want to hear it. Now what will Nancy "we won, we get to write the bill" Pelosi and friends do to fix this mess!
pushed out beyond the 2014 elections....I wonder why?
So, is this delay specifically allowed by the law, or is the administration simply ignoring the law they created for their own benefit?
yeah, it's always about the businesses – never about the people – people who have no help for medical problems – no insurance no money to pay the bills should they be forced to see a doctor or be hospitalized. yup – all about business.
The dems NEVER think anything through! This isn't about reporting, it's about losing jobs. It will get delayed until after the next presidential election, watch and see. This part of the law will cause the unemployment rate to jump significantly, as employers cut back to under 50 employees, or cut back to under 50 FULL TIME employees by cutting hours and benefits. The dems cannot have a rising unemployment number going into the next presidential election. The dems are not about the American people, they are about bigger government and more power! Its all a game of chess to them. Calculated moves, along with great distractions, in order to keep the "sheeple" out of the loop, but still keep their votes by making it appear that they are trying to help them.
So the large corporations get a free pass for next year while individuals still get threatened by the tax penalty garbage. What a surprise.
Looks like the president followed Senator Nancy Pelosi's statement that "we'll have to pass Obamacare to know what's in it." So now as he and his staff members saw the for-sure bedlam the business insurance mandate will create, they are excising it from the full plan. We don't know where the sword will strike next, but we probably will know as soon as he reads a bit further.
Oops! We almost forgot to hold 2014 elections FIRST before implementing the onerous part of Obamacare.
Things going swimmingly!
so employees will still be forced to purchase health insurance or be fined but the 50+ businesses won't have to purchase for their employees for another year?
There is no problem, we voted for gov health care. Do Not Delay this! Prez Obama will be known for, sorry not the affordable care act, but Obamacare, HELLO let it happen!!! WE Americans voted for it!!!!! Let the paradise begin!
Republicans want to replace ObamaCare with.....WHAT?! Seriously, what idea do they have to fix healthcare. I've read every article I can find on the subject and I've yet to hear one, just ONE idea that Republicans have. All I know is what they don't want (healtcare for more people).
I already know ObamaCare won't fix our healthcare system. The article in TIME magazine (Bitter Pill) all ready addressed that issue. But at least he is trying something, ANYTHING. Seriously, what is the Republicans plan to make healthcare work as well as it does in other countries? What is their idea to raise us to the top of the charts instead of at the bottom; beaten by countries I have difficulty finding on a map. It's disgraceful and everyone around the world knows it. Don't we have ANY pride anymore in this country? This was a problem decades ago. And look at us. Still here being laughed at and humiliated, afraid, and dying.
This also pushes of the Obama administration having to deal too long with the ugly aftermath of its handiwork.
Curious about the individual mandate. They are postponing the company requirement roll-out, from January 2014 to January 2015. However, what about the individual requirement, that each American citizen has to have coverage or suffer a tax penalty? Are they postponing that? So now employers could cancel health coverage for employees in 2014, and employees then be required to come up with their own insurance to avoid a tax penalty? I don't know, it all seems very confusing.
What is really amazing is that it wasn't postponed until mid 2016 so the O won't have any more administrative gafs.
Thus forcing more people to apply for the government option since the individual mandate still seems to be going into effect...
Obamacare a trainwreck waiting to happen.
I distinctly recall our President feverishly making many promises, most of which we should all be familiar with, and none of which are coming true. Quite the opposite and I suspect he is going to blame Bush.
YES!!! because no one is setting up the insurance cartels or anything – there is no movement. bureaucratic resistance.
Then postpone the penality for individuals who have not purchased health insurance. Give them one more year just like business to get their house in order.
Dems: we have to wait until after the elections so people won't know how screwed they are until its too late to affect us!
Look at all the people hating on Obama. Gotta love the CNN boards. How many of you even own a business? I do. And I support Obama and Obamacare.
Who would have seen this coming!?