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. Qotsa

    FFS....... and it begins.

    July 3, 2013 08:50 am at 8:50 am |
  2. cb

    Democrats want to delay it until after the 2014 mid-term elections.

    July 3, 2013 08:51 am at 8:51 am |
  3. kevin

    Anyone who voted for Obama in 2008 was an optimist. Anyone who voted for Obama in 2012 was a fool.

    July 3, 2013 08:53 am at 8:53 am |
  4. 1termlimits

    Delay due to politics -Can't have a bad law go into effect with mid term elections right around the corner.

    July 3, 2013 08:55 am at 8:55 am |
  5. you'll find out what is in it after you pass it!

    Garbage is garbage anyway you spell it...

    July 3, 2013 08:56 am at 8:56 am |
  6. ShawnDH

    I love how Republicans are pretending like the mandate wasn't a conservative idea launched by the Heritage Foundation and promoted FOR YEARS a conservative approach to healthcare reform, even being enacted into law by Mittens in Massachusetts...which now has the lowest uninsured rate and one of the most healthful populations in the country.

    It's a way for us to stop having to pay for moochers of the system which is one of the reasons we pay so much for healthcare. Now conservatives want us to pay for moochers because Barack Obama. Mmmmkay then.

    July 3, 2013 08:59 am at 8:59 am |
  7. tiz

    Obamacare is such a joke...... "we have to pass it to see what's in it..." yeah... that was a good idea....
    we need reform...but the way this was jammed through says all you need to know....

    epic fail.

    July 3, 2013 08:59 am at 8:59 am |
  8. James PDX

    Sen. Mitch McConnell added: “The fact remains that Obamacare needs to be repealed and replaced with common-sense reforms that actually lower costs for Americans."

    So why didn't you and your fellow naysaying Republicans create these easy-peasy "common-sense" reforms? You've had your entirely too long political careers to get it done. Yet you've done absolutely nothing but complain and obstruct, which are the only things you continue to get better and more prolific at. I dislike both corrupt parties, but the Republicans continue to take the cake of corruption and ineptitude.

    July 3, 2013 09:02 am at 9:02 am |
  9. Dee Bradley

    This is a tacit admission of the law's cumbersome, expensive, complex, burdensome nature. Now that they've passed it and are beginning to understand the details, they're afraid to implement the darn thing.

    July 3, 2013 09:03 am at 9:03 am |
  10. k-man329

    Yeah, the government is going to make something simpler... riiiight...

    July 3, 2013 09:03 am at 9:03 am |
  11. Qotsa

    Well, so many people have already had hours cut or been laid off because of the Affordable Health Care Act's effect on greedy employers and I am not talking about small businesses. Talk to the working class in bigger corporations, cashiers and restaurant employees for example, and see how many of them tell you their hours were cut to part time or about the people getting laid off. Some blame Obamacare and some blame the corporations. If the people do not want The Affordable Health Care Act, then it needs to go.

    July 3, 2013 09:04 am at 9:04 am |
  12. NClaw441

    I thought the health care crisis was indeed a crisis. The legislation was hastily passed so that the crisis could be addressed. The implementation of a portion of the program was initially delayed until 2014– 5 years after passage. NOW even that is not enough. How can the president continue to let people suffer? If this is a political concern having to do with the midterm elections, is the president buying votes with the suffering of those who have no health care?

    July 3, 2013 09:05 am at 9:05 am |
  13. George Dixon

    Obama gaming the 2014 election.....

    Obama/IRS 2012 – Obama/IRS 2014

    The IRS will implement ObamaCare....fitting

    July 3, 2013 09:05 am at 9:05 am |
  14. drc

    I'm shocked, you mean this one piece of the garbage legislation is being put off until after the mid-term elections. Maybe they shoudl have actually 'read the bill' before passing it.

    July 3, 2013 09:06 am at 9:06 am |
  15. ABarker

    "Sen. Max Baucus, a key Democrat who helped craft the legislation, expressed serious anxiety in April about its implementation."

    That's rather telling....

    July 3, 2013 09:06 am at 9:06 am |
  16. Mike

    Affordable Care is only affordable if you have the money to pay for it.

    July 3, 2013 09:06 am at 9:06 am |
  17. John

    Is is a 'law' or isn't it? And if an individual was counting on their employer providing health insurance so they do not get penalized, will the IRS now tax the individual for failing to get their own personal insurance?

    July 3, 2013 09:10 am at 9:10 am |
  18. Rudy NYC

    The insurance rates offered in California's pool are roughly half of what the doomsayers predicted.

    July 3, 2013 09:10 am at 9:10 am |
  19. NOMore

    Delayed by a year !! Good News for American Businesses as it is likely to be altered drastically. If kept end of the year would have seen massive layoffs and shortened hours.

    July 3, 2013 09:11 am at 9:11 am |
  20. UnafraidDem

    It was only delayed so the Dems don't lose the midterm elections. Obamacare is a nightmare.

    July 3, 2013 09:11 am at 9:11 am |
  21. Dan

    Ted Kennedy was looking down smiling when the bill was passed, now he's a little upset and confused.

    Pelosi on Obamacare: I Knew Ted Kennedy ‘Would Go to Heaven and Help Us Pass the Bill’

    July 3, 2013 09:11 am at 9:11 am |
  22. Jim

    “This announcement means even the Obama administration knows the 'train wreck' will only get worse,” House Speaker John Boehner said.

    I love it when one politician tells us what another politician "knows". Way to blow smoke John.

    July 3, 2013 09:13 am at 9:13 am |
  23. Brian

    My guess is that you'll see this option go away as the exchanges get rooted and take shape. If people have enough options, employees can always opt out of their employer backed plan for one they actually like. The healthcare issue has never been about the uninsured but overpriced, underwhelming employer backed healthcare plans. It's true.

    July 3, 2013 09:15 am at 9:15 am |
  24. Kelldog

    The sad truth is that many will be forced out of the current plans (Broken promise 1), Costs have already skyrockted (Broken promise 2) and will continue to rise and when all is said and done 20Million people will still be uninsured.
    What a friggin disaster

    July 3, 2013 09:19 am at 9:19 am |
  25. klamerus@Pobox.com

    Wow, if that photo's not the model collection of standby dem hack congressmen, I don't know what is.

    July 3, 2013 09:21 am at 9:21 am |
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