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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How can the executive branch unilaterally decide to delay parts of implementation of a law passed by congress? This sounds dictatorial to me.
Amazing. Now they delay it. Some companies (mine included) already jacked up the co-pay in order to cover those folks that can't afford it. Already seeing the results of the so-called affordable healthcare, I can tell you that I can no longer afford coverage as I once could. The increase in employee contribution (now based on salary) to cover those at the lower pay scale is wrong and still hurts the middle class income. For me, it was either stay with the same coverage and have the $1000+ increase in paycheck contribution or change coverage with no co-pay and high deductible.. I decided on the 2nd and decided to stop taking the BP med and skipping most checkups. Is this venting? Yes. But people need to realize that the cost to pay for Obamacare comes out of their paychecks one way or the other. Either in taxes or cuts in benefits.
Unfortunitly the company I work for does not offer its employees health insurance. So what are supposed to do
I can't stand these Republicans. Nothing will ever get done with them around. Their political strategy for the last 15 years has been to simply repeat lies over and over until their base buys into them. We don't need 2 parties if that's all they bring to the debate.
One again Obama caves in to big business. (in this case Wal-Mart) No big surprise for a Democrat in name only.
What have the businesses been doing for 3 years and 3 months? They knew this was coming. Obamacare was passed in March 2010. Penalties for firms not providing health coverage to employees will now begin in 2015 – after next year’s congressional elections. DO YOU THINK THIS HAS SOMETHING TO DO WITH IT?
This just goes to show that Obamacare is imploding under it's own weight. To this day now one still really knows what is ahead for this and this will go down in history as the biggest presidential blunders
Typical Democratic way. Throw out the bone and hope someone else will fix it so they look good.
Just like Nancy said, we will just have to pass it to see what's in it and you Dems said "OKAY"!!!
Perhaps if the Dems had really read the bill first and used their brain's they may have gotten it right for a change.
Now it is up to someone else to carry the burden of making it whole.
I love how they turn the sound off on a story like this...
Baucus is correct, they really handled the PR for this very poorly. The conservatives were the only ones talking about Obamacare, and other than reclaiming the name during the election, the Democrats just completely failed to sell this to the public.
Hahahaha.........Obama gives big business a pass but individuals still have to buy insurance or pay the penalty. Hows that change working out for you?
Figures CNN does let anyone comment on this boondoggle
"It is already a little more affordable for businesses to offer health coverage to their employees?" Where's the data on that? Costs for individual and small group health plans have jumped dramatically in just the last two years as insurance companies scramble to "cost adjust" for Obamacare. What is next? Delay implementation until he is out of office (clearly his intent)? What an idiotic plan. No way can it save money as promised, much less maintain or generate economic growth
postpone until after the midterm elections. as usual, ram it down our throats and play politics.
This is a surprise. Who could have ever guessed that the government that can't even deliver the mail efficiently can't change the healthcare system without screwing it up?
Interesting – no responses even though I just left one. Are we not allowed to criticize Obama and big government?
Next time Congress, read the law first, please.
Keep pushing it back, it's bad for our nation.
Of course it was postponed, but note that only the employer mandate was postponed, not the individual mandate. This has a two-fold benefit for Democrats: it won't happen during the mid-term election year, potentially delaying huge premium spikes that would make the law even more unpopular, and it will force more to go on the exchanges to meet the individual mandate when their employer doesn't provide coverage.
And Baucus gave it coverage by calling it a "train wreck". Coincidence or planned political move?
Okay now let us cut the BS why don't we force the insurance companies to make health insurance reasonable and we can pay for our own health care yeah how about that.
Okay so now let us require the insurance companies to get a grip and stop holding us hostage make the rates affordable and we will cover ourselves.
obama care is a "train wreck" and as predicted obama care is starting to unravel! America continue the pressure on your Representatives and maybe, just maybe we can roll this obama care mess back into the barn?
Pfft Have Republicans ever done anything about the costs of health care before? Every Democrat President since the 1930s has tried and failed to reform our health care system until Obama. No Republican President has ever mentioned the word health care reform while in office. The day a Republican President does anything to help the average Joe afford health insurance in this country will be a cold day in _ell.
Well ya don't say? Obama wants to postpone Obamacare for "political reasons"...why else would he do this other than the fact that a large majority of Americans already understands that this law is garbage?
"It is better to do this right than fast ." The Democrats should have taken this attitude before stuffing this down the throats of the American people . It's a train-wreck happening in front of our eyes . Even Jarrett knows this .