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 was delayed related to the amnesty bill being discussed in Congress now. If the Senate bill was the law, 'legal' workers that use to be 'illegal' would NOT be counted towards the 50 employee number. Thus employers would have yet another incentive to hire one of these 'newly legal' workers over a US citizen.
How about the unconstitutional individual mandate that forces me to pay a $1000 penalty for not buying a private product...
Why??? Very pathetic. It is not right to do this law to be implemented when this law fully takes effect in January 2014 with all other provisions notwithstanding any other provisions in its selient features. Just implement.
We need to delay this until 3015. Nonetheless, isn't this a legislative issue to decide, not an executive branch issue? Is Obama once again believing he is a monarch?
There are bound to be lots of problems with this giant bill. Just another example of why "sweeping" legislation is generally bad legislation. The senate immigration bill is another example.
Much better to govern small, and perform smart, targeted actions.
How legal is this? Does the executive branch have the authority to ignore, alter, or reinterpret laws unilaterally? I don't think so.
I'm sorry companies with 50 or more employees have to provide healthcare for their employees. I feel more sorry for the employees who don't have health care because their company is trying to save a buck at their expense.
How about we just delay it indefinitely?
Obamacare.. What a joke. Dont believe me? Research it.
Just more confusion and job killing by this inept administration – let's just delay and obfuscate the coming train wreck. It almost appears to be a planned failure with the hope of going to single payer. Please keep electing republicans to the house or we'll all be taxed and spent to death
Please do not delay–delay defeats equity.
Of course they are delaying it. They are afraid that the voters will see the HUGE bill that this ridiculous legislation will hammer them with and the Dems will get crushed in the mid terms
The truth is they don't want to roll it out because they KNOW it will be a train wreck and they are afraid of the 2014 elections. The Obama administration isn't doing it for the people because he doesn't give a darn about the people. It is all for votes and only a moron would beleive otherwise
This system needs to be shifted into incentivizing the states to implement single payer. We're going to end up with single payer anyway. Let's minimize how long we have to stay with this conservative think-tank invented system.
I assume the individual mandate will be postponed as well? No exchange notice required for October 1? This is a game-changer!!
Every company should offer health insurance even it there is one worker. That's plain and simple!!!!!!!!!!
So small business gets the shaft?
There insuring more votes before invoking the provision.
Ever about the vote!
I guess the Communist Social Democratic Party got cornered by the Repubs. Too bad about the 8 million people that CNN said lost their health insurance in January due to companies preparing for this coming requirement and also laid off the workers.. I wonder if either party will pay their medical bills for this year.
What does this do to the costs of the bill? I know they were depending a lot on penalty's being enforced to pay for it, but now they are pushing back some of that money another year... Will individuals get the same extension to 2014 or do the people who work at places who don't give them insurance have to now go out of their way to buy insurance while their companies get a free year...
So now the Obama administration will put off health insurance for another year. Which means that business can`t hire anyone because of the uncertainty of the health care law. This whole thing I believe is now a fiasco. And I have been a strong supporter of the law. Obama you should have been concentrating on job creation from day one. If you had been we would not have been stuck in this rut we are now in.
No one was hiring because of this flawed mess and I know several companies that had just over 50 people and laid off workers to avoid Obamacare compliance. We needed health care reform and we got Obamacare we just could not see what was in it until it was passed, right Nancy. Why does health care have to be tied to your employment? Why can't I purchase more health care that I am going to be provide with if I choose to? What a mess!! I guess congressional elections are next year and they didn't to let the cat completely out of the bag.
This is no surprise. The Democrats running for seats in 2014 know their constituents are not happy with this law. So push it to 2015 and then we get screwed.
The whole country is going to part-time and temporary work. These politicians are clueless.
Sure delay this job killing debacle until after the 2014 mid terms. Finally some of that promised transparency.