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 are trying to figure out how to get out of this mess. Many businesses are now giving up health care benefits because the fine is cheaper. Health insurance is skyrocketing and hospitals are laying off. What a mess.
Why postpone it? Let this law go into effect, and let the American people see what is going to happen.
The first domino to fall. This law is doomed for failure and of course it was delayed a year of course it will probably be after the 2014 election right? Just enough time for the Democrats to try and win the elections. What a joke.
I guess I'm a genius. I said no way can we roll this out.
gee. i am sure this has NOTHING to do with the 2014 elections...so let's kick the can down the raod so it is not an issue that will cripple the likes of Nancy Bellalegosi, Diane FrankenFeinstein, and others... oh tell me no one saw THIS coming?
When all of this blows up Obama will be long gone and whoever is in office is going to have to take the heat for the mess.
"We have listened to your feedback. And we are taking action"
Now if they'll just listen to the people rather than the businesses...
Will this delay affect my health care since my doctor group decided to close it's doors?
It is truly a sad day in America when companies care more about their bottom line than they do the employees who make the money for them. As I have personally experienced... we all know what happens when a magnate has to decide between a new yacht and benefits for employees. He goes with the yacht every time.
OK, let's talk about vanishing frogs instead.
2015? Really? Poor planning and lousy government
The Republicans are looking to repeal the Obama health-care policy under the auspices of saying they have a better plan. But their plan would be to privatize insurance and go to private health insurance accounts which would only be More Costly to Americans! That's the part they are not telling you about but certainly should in order to be completely upfront with you.
When Obama promised in his campaign to be transparent and give the people few days or more to consider and understand any new laws it was just to get our votes. The Obama care was signed by him within few hours after passing by congress. Until today majority of the people do not know how does it works and the small businessmen
can not effort it and the big businesses do not know how to implement it or report it.
This is no surprise. The Democrats cannot afford a botched launch of its greatest recent achievement. I predict another delay till post 2016 elections.
Not a surprise to me!
No one ever needs health insurance, while eventually everyone needs health care. Obama solved the wrong problem.
And in the process is making every American (or their employer) beholden to for-profit health insurance companies.
When you going to learn Obama
So what does this mean for the individual who will be penalized for not having insurance by 2014? If their employers aren't required to provide insurance for another year, what is the status for employees of those companies? Does the burden now fall back to them? That doesn't seem right.
If a company can't afford to provide its employees with health care, it shouldn't be hiring people. Similar arguments could have been made in previous times about companies not being able to afford to hire people if they couldn't hire children, or if they had to pay a minimum wage. If you can't support a cost of business that provides your employees with basic necessities, you need to be more efficient or improve your business practices.
I am glad that people are finally realizing what crappy legislation the ACA is. It just makes me furious that the democrate politicians were in such a rush to pass this garbage even though much of it does not go into affect for years and it wont fix the problems. " You have to pass it to see whats in it"?!?!! Dumber words were never spoken and Palosi has said a lot of dumnb words.
What "common sense reforms" have the Republicans proposed?
oh how nice for them just in time to start manipulating things for the upcoming 2014 elections cycle.,
the democrats just could'nt afford the outrage of higher unemployment and have a few more million more lay offs right before an election all due to the very high cost of this faked up "obama does'nt care" mandate that all employers who employ over fifty people pay for this unaffordable employee healthcare scam designed to crash private healthcare insurers and force the government to come up with yet another fix which is called single payer stae run health care like the have in the uk or in canada or worse cuba.
"it has absolutely nothing to do with the 2014 election cycle.., keep moving along nothing to see here.,"
is nancy still laughing about how she did'nt read this obomination of a fake law?
"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." Such employers are not required to PAY the premiums of the health insurance, only to provide the coverage ... "group" coverage is much less costly than "private" coverage. The employers need merely to negotiate with insurers to secure quality, affordable health coverage and require the employees to pay the premiums ... some of the nation's largest employers do so now. Even if employers paid a portion of the premiums, those costs are "business expenses" – deductible from the employers' gross income for tax purposes. Employees, on the other hand, are unable to "write off" those costs.
As for the GOP's complaints, NOTHING short of absolute repeal of the AHCA will appease the GOP. It has NO replacement and/or improvements in mind, just repeal. It is ironic that the GOP applauded RomneyCare yet find fault with ObamaCare – the same concept but conceived by a Republican, so it's OK.