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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I just lost 12 hrs of work because of Obamacare all employers r making everyone part time and I carry my own health insurance. Pretty soon lower wage worker's will have two part time jobs
It's being delayed cause it isn't going to work. Workers are going to get fired, prices are going to go up up, our taxes are going to be increased, I mean this is a mess and is not meeting up to the hype it was sold on. It needs to go.
" It's better to do this right than fast ." The democrats should have taken this position before they hustled this fiasco through and stuffed it down Americas' throat . Even Jarrett knows this . She has got to be the worst president we've ever had . You know that she is in charge , right ? It wasn't Oblahblah who moved the date back a year .
I thought it took congress to change the law,not a desicion by the treasury or president?Will probably be nice for a little midterm election boost though(if you still buy the who left right political system).
I was shocked that CNN actually reported this. The train wreck has been postponed until after the 2014 elections. Now who would of guess that. Two major insurance providers moved out of California limiting the exchange and ensuring high costs with only three providers remaining. ObamaCare is a disaster waiting to happen.
Uh Oh, I have a BAD feeling about this delay.
Oh, so even dear leader thinks it's a bad time to implement it? I'm sure there was a few more laws he wants to add.
We as Americans need to sue to force the govvernment to impliment this LAW, then the truth can come out and we can start the impeachment hearings.
The only thing I want out of this is affordable health insurance. I'm not looking for a handout. But when insurance will cost me a whole paycheck each month there is no way for me to afford it. I rather pay the tax penalty than pay 400 dollars a month for something I would hardly use. This is the only thing I wanted out health reform. Is this too much to ask or am I just being a liberal communist again?
There are thousands plus of small businesses that provide insurance already with no problems and have been providing for years.
Your changing laws that were to begin in 2014 and now moved to 2015 to give small businesses a break because of the complexity of the laws. What about people who are self-employed ect.. are they going to get a break also??
If you create a law to require everyone to have insurance then it is what it is. The law is for everyone to have insurance and at the same time with no special provisions to anyone. If you didn't already add a special provision for small business to get a break for a year, then they need to go off of the same law as everyone else does.
When have any laws been written that have not been complex???
If businesses focused on preparing for this mandate instead of waiting around complaining or contributing money to the GOP in the hope they would have a different president they would not be in this position. The bet on an administrative chafe was lost and it is time to follow the law.
Businesses overwork employees and do not pay them enough while they are lining their own pockets. Upper management and CEO pay is at such a high multiple from standard employees it boggles the mind.
This is not a hard thing to do – get it done and treat employees with the respect and dignity they deserve.
politics as usaul. delay til after the 2014 elections. hillary must be loving this.
After three years this critical component still has not been figured out? It should be no surprise that this doomed piece of legislation is on hold until after the 2014 elections. With a most likely strong showing by the Republicans in the midterms, the ACA will be dismantled and Obama/Democrats will have dodged the bullet and found a scapegoat at the same time. In short, much like this article the ACA is buried.
What an overbearing, nonsensical, piece-milled, ineffective law this is. Why penalize a business who already provides insurance by costing them money to report some BS back to Washington?
This is a BFD!!!!
Awe come on, Congress was so sure they got it right when they passed this quagmire the way they did. Let's get on with this unquantifiable disaster... don't turn cowardice now just when things are starting to heat up. Live with the brilliance of your decisions. Lets go.
An obvious political move to hide the looming disaster that is ObamaCare, and soften the impact on the 2014 elections.
A blatant and shameful attempt at trying to manipulate the 2014 mid-terms. This plan will also fail as those who have jobs and run companies of 50 employees or are not the low information voters that vote democrat. These people know what is coming and will decimate the Democratic senate anyway. Lame Duck here we come......
The ACA continues to prove itself as nothing more than a Health Insurance industry bailout causing nothing but increased costs and profits for the industry. The law gives no benefit to the working America. The only benefits are increased taxes and profits for the health care industry.
Ok, I guess this is another way of saying Obama care is not what we need. What a total screw up and it will only get worse. We should all be grateful t the Tea Party or what ever conservative movement out there. If we did not take back the house, we would be seeing even more screw ups. Everyone agree's we need a change in the health care system, but government control is not the answer. We are a democratic and capitalistic society and to change from that only brings destruction. You think wall street runs america, wait until you have a president/dictator running everything.
Pathetic, too many Dems don't want to lose their jobs next year when Obamacare pushes the economy in reverse.
OK... I get it. So apparently this portion of Obamacare is what's best for the nation... but just not until AFTER the mid-term elections...
"repeal" Obamacare. How about those in government actually red bills before they are passed into law?
There are good and bad points regarding Obamacare. The Republicans should focus on the good, so to rewrite the bill. The Democrats majority never really read the bill, but pass it any way, now keep holding back the start of the major component. Flush the Healthcare bill and start over again, and this time get it right!
I just can't spell today. Sorry.