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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Stupidly called The Affordable Care Act
Postponements and waivers seems to be the solution to the Affordable Care Act, at least in an attempt to gain politically. This is just shameless and indicates that the law is whatever the Obama administration wants it to be. Seems like Pelosi was prophetic, but we still don't know what is in the law.
People are slowly coming around to what a disaster this forced piece of legislation is. Even the dems are running away from it now, but WE will be stuck with it.
The Obama administration has done a poor job in informing the public about the details of Obamacare and how it will affect different constituencies. I'm not sure if this is because they simpl;y don't know how it will be implemented, or whether they have dropped the ball on educating the public on how the bill will work. Just the other day I spoke to the chief financial councelor at a major hospital here in Atlanta who admitted that he had no clue how Obamacare was supposed to work. I find that amazing, and disturbing. It's hardly surprising that they need an extra year.
WHAT A JOKE! Obamacare is a mess!T
This independent would like a little better explanation than its a train wreck. Give me some alternatives, that is why didn't get my vote in 2012
mcconnel: "Obamacare costs too much and it isn’t working the way the administration promised,”
mcconnel failed in his #1 goal, to make Obama a one-term President. He failed to keep the economy down (though he tried to implement European-style austerity measures to keep Obama from his recovery). So his only chance for that feel-good moment is to keep 'Obamacare' from working.
cantor: "The best delay for ObamaCare is a permanent one,"
cantor: Let's deny young Americans the the chance to stay on their parents' policies until they get on their own!!
cantor: Let's deny those with pre-existing conditions the opportunity for affordable healthcare! ( or any at all )!
cantor: Let's keep small businesses from getting in exchanges that might help them get rates similar to big businesses!!
Gotta Love Em, those repubs.
I'm glad that the government is recognizing that this law isn't ready for implementation. However delaying a year will accomplish nothing unless they actually look at the law and make changes so that businesses actually have a chance at complying with the law. I'm not talking about repealing the Affordable Care Act (though I admit that would be my preference) – I mean making common sense changes to allow companies to evaluate hours using the same period of time they currently pay people – be that weekly, bi-weekly, or monthly.
Outstanding. Let's get the 2014 elections out of the way and with the help of the media this mess will go into effect after I'm gone.
So; Bush drove the 'bus into the ditch'. Well; this would make Obama the 'engineer' driving the train into a gulch.
Its a crapola job killer. I welcome that. However, as usual the POTUS capitulates and sucks up to the rich.
They cut my hours 40 to 18 hours a week..
Now I don't have money to pay for health insurance, now I'm going to apply for medical low income.
The only train wreck that will come down will be for congress. Americans will speak up and members of congress will lose their positions. First equality for all, gay or straight, and soon healthcare for all RICH OR POOR!
Where did Dems find this guy?????
Singlepayer system is the only way
These people are pathetic and don't know what they are doing!
The Democrats could have given us a public option (they had the votes) but they decided they were more comfortable with a mandate that their insurance company overlords would be more comfortable with. Now it seems to be blowing up in their faces. Congratulations, Dems. This unnecessary compromise brought us change that no one on either side can believe in.
I guess this is part of the"finding out what's in the bill after we sign it" that Pelosi was speaking of. The train wreck continues.
Can't look bad for those 2014 elections can we?
The implementation of Obamacare is only going to get worse. They call it healthcare but they treat it like a tax and a punishment. They've had 2 years and more to plan and at the last moment they change. How is business ever going to respond when management has to make plans with the IRS standing by to punish them for the slightest misstep. Several businesses are set to close their doors on October 1st based on a legal interpretation of Obamacare. Their employees were told what their contribution would be based on Obamacare and in a company vote refused to accept the difference. In one case the owner just said to shut it all down. He will retire. In another case the owner sold his business to a larger company that can manage all this. The employees are still going to pay the increase in healthcare and now take a pay cut and a large percentage will be laid off. In a third case there is a union involved and the owner knows what the union response will be and he's shutting it all down ahead of time. Evidently Obamacare will be very good at achieving Obama's goals. Obamacare will become not only an efficient job killer but a vehicle for the expansion of unemployment, welfare, disability and EBT cards. To say Obamacare was not designed to destroy and complicate is to say a hammer was not designed to hit nails.
Mr. President Obama thinks it's wise to avoid further economic distress by postponing a law he created and signed into action. How smart of Mr. President. Perhaps he knows that something economically wrong is going to happen when the consequences of his Obama Care act hit the fan.
Don't forget we are already at nearly 17 trillion in debt as a nation and financial aid for student loan interest rates have just doubled. Unemployment rates don't look any better either.
They've realized that Obamacare is such a trainwreck it would doom the Senate Dems in the mid-terms. This is blatantly transparent political decision. They will then force it down the throats of the unwilling masses during his last two years. What happened to "Its. The. Law" just back in May? Regretting that snarky message from the Whitehouse intern at the helm that day?
Health care is not a right, it is a priveledge. If someone is too poor to afford health insurance that's their tough luck. Let 'em die!
Obama barely managed to push the health care act through the legislation. Those who voted did not have a chance to read the bill. After that, Obamacare proved to be much more expensive and much more complex than originally presented. It is time to take another vote - it will be a much more informed one.
Headline should be a small part of Obamacare delayed...
not key provision...