July 2nd, 2013
06:21 PM ET
10 months ago

Key Obamacare provision delayed

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.

READ MORE: Myths about Obamacare

“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.”

READ MORE: How the next battle over Obamacare could be the ugliest yet

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.

READ MORE: Six companies cashing in on Obamacare


Filed under: Health care • President Obama
soundoff (796 Responses)
  1. U LABY

    REPEAL AND REPLACE. The only thing that makes sense at the moment. 1200 pages of nonsense legislation. Maybe someone should have read this law before it was voted into effect.

    July 2, 2013 11:32 pm at 11:32 pm |
  2. mediafail2012

    Lol, seriously? Four years isn't long enough? Much more likely is that Obamacare already isn't popular at all and the really bad parts that would affect everyone were going to take effect the year of the midterm elections making it even worse.

    So which do you think is more likely the reason of this delay? It still can't be understood after 4 years or it will hurt the democrats in the midterm elections so it was delayed until 2015?

    July 2, 2013 11:33 pm at 11:33 pm |
  3. matt5mn

    As one that has been front and center in working with business owners and insurance agents – this has been a colossal waste of taxpayer dollars. What this will do is drive many of the people that currently work in market segments that are not being offered “Affordable Coverage” to the public exchange markets. Effectively it is giving the employers (employing 51 or more people) a one year reprive at the taxpayers expense. The result is a number of the uninsured are handed the keys to the car – being offered insurance plans that provide essential health benefits that cost money. Their perception is that they can go into the ER, pay a portion of the services at a fraction of the cost, and walk away while the insurance is left to pick up the rest. Oh, and because all insurance companies that participate are paid on the same level as the rest, if their exposure to risk is higher relative to everyone else, the government provides subsides to offset the cost. Prime example where this is already happening is in California, where they have already estimated costs to go up 6% – without even having 1 person on their exchange.

    July 2, 2013 11:34 pm at 11:34 pm |
  4. smdahl

    Another broken promise and another crack in this corrupt gov't.

    July 2, 2013 11:37 pm at 11:37 pm |
  5. keith from Texas

    CNN is the only major news outlet that is completely ignoring the elephant in the room! This delay is solely for political survivorship fro the Demtards running for office in the 2014 elections. Obozo could care less about small businesses.

    July 2, 2013 11:38 pm at 11:38 pm |
  6. dnokc

    Fact of the matter is 1. Businesses intend to cut workers hours below 30 hours a week if forced to. 2. There are numerous ways of insuring there are NEVER more than 50 individuals employed. Government feels it can dictate to business...guess again. I hate to say it but think like our grandfathers did...the ONLY hope workers will get business to provide decent wages and benefits such as health care is to unionize.

    July 2, 2013 11:52 pm at 11:52 pm |
  7. mec

    Have to keep people voting for democrats somehow.

    July 2, 2013 11:53 pm at 11:53 pm |
  8. ricke1949

    14000 pqges of regulations and they are still writing.

    July 2, 2013 11:55 pm at 11:55 pm |
  9. Cdbobbie

    Politics, politics, politics!!!!

    July 3, 2013 12:04 am at 12:04 am |
  10. PinkontheinsideDoes

    Delayed just past the mid term elections. Brilliant!

    July 3, 2013 12:08 am at 12:08 am |
  11. jon boy

    So if Obama care only applies to companies with 50+ employees, most of whom already provide insurance, what's the point of it, other than to provide more government "oversight". The whole idea was to provide insurance to 'everyone", yet small business who employ most of the people aren't included. For this we get 2000+ pages of rule and 16000+ pages of regulations and who knows how many "regulators" to oversee it all.

    No business should be required to provide insurance. If the goal is to insure everyone, then just provide government paid insurance .... isn't that a scary thought? Oh wait, we already have that don't we, it's called Emergency Room service. We could all have the same effectiveness and efficiency as the government run Veteran's Administration. Oh happy day on that!

    July 3, 2013 12:09 am at 12:09 am |
  12. Christina

    Republicans are the train wreck. Watch them lose big in the next elections due to their insistence on pushing religion on the law . By the way thanks guys for helping get people back to work in livable wage jobs rather than focusing on women's reproductive rights! You have all shown your ineptitude at serving the people of the United States. It's too bad President Obama can't run for a third term in office because I'm positive he would beat any lame duck republican . Religious fanatics have no objectivity or respect for other people's religious beliefs and are incapable of respecting our first amendment.

    July 3, 2013 12:09 am at 12:09 am |
  13. Michael Benjamin

    Just goes to show the government is powerless if enough people object.

    July 3, 2013 12:10 am at 12:10 am |
  14. inthemiddle

    I call B.S. The Socialist Democratic party know when this pile of steaming feces is enforced they will not only lose the House and the Senate in 2014 and then Hillary can kiss the Presidency goodbye, again. This delay is strictly political and nothing else.

    July 3, 2013 12:11 am at 12:11 am |
  15. XXxxMacleodxxXX

    lol feds already have plans to break the very law they trumpeted

    July 3, 2013 12:12 am at 12:12 am |
  16. Kris

    The GOP is determined to sabotage the roll out of obamacare even to the point of lying..shame on them!

    July 3, 2013 12:17 am at 12:17 am |
  17. LegalOne

    And the march towards Socialism continues. Very sad!

    July 3, 2013 12:21 am at 12:21 am |
  18. D.L. Kisting

    It's all so totally ridiculous, there are no resonable answers. It needsto be repealed. NOW.

    July 3, 2013 12:23 am at 12:23 am |
  19. d

    sucks to be those that need health insurance but aren't going to get it now. Thanks Obama the Sellout, I VOTED FOR U TWICE

    July 3, 2013 12:26 am at 12:26 am |
  20. Abunai

    "Penalties for firms not providing health coverage to employees will now begin in 2015 – after next year’s congressional elections."

    Well, THAT'S convenient timing.
    Don't impose the painful part of this monstrosity until after you dupe the voters again.
    I'll be interested to see the progressives here defend this subterfuge.

    July 3, 2013 12:26 am at 12:26 am |
  21. Dennis

    Delayed until after the election. They know it sucks and will cost votes. Its all about votes after all. Not about you, not about me. It's all about power and hanging on to it. Obama is just the new puppet with the same master.

    July 3, 2013 12:29 am at 12:29 am |
  22. edmundburkeson

    Pelosi's hands are bigger than Obamas.' Waxman's ears are bigger than Obama's hands.

    July 3, 2013 12:29 am at 12:29 am |
  23. woodlander2

    This is Obama's legacy!. He makes Jimmy Carter look like a star.

    July 3, 2013 12:35 am at 12:35 am |
  24. gt

    Good news. If the business do not have to get insurance for their employees than the employees do not have to worry about insurance until January 1, 2015 also. Every one else that does not have insurance you do not have to get insurance until January 1, 2015. You can tell Obama and the IRS to f them selves.

    July 3, 2013 12:36 am at 12:36 am |
  25. nomad2003

    Just happens to be AFTER the next election cycle... amazing... avoid a train wreck to keep from having bad news...
    There is enough of a mess with Bengahzi, NSA, IRS, etc. Since the IRS can not seem to keep its data safe, I sure do not want all medical information in an unsecure place.

    As even democrats have said.. it is a train wreck .....

    July 3, 2013 12:37 am at 12:37 am |
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