July 2nd, 2013
06:21 PM ET
1 year 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. Jason

    Ah, delaying the employer mandate until after the Mid-term elections......anyone noticing a trend here?

    July 3, 2013 09:24 am at 9:24 am |
  2. Rachel

    But but but I thought this was the best thing ever according to democrats. What happened? What a joke.

    July 3, 2013 09:28 am at 9:28 am |
  3. What a mess!!

    Thanks, Obama!

    July 3, 2013 09:29 am at 9:29 am |
  4. Finally

    Finally getting a clue

    July 3, 2013 09:29 am at 9:29 am |
  5. MNClownfactory

    This is why America is having such a hard time, corporations won't do anything to help their employee's until forced then they do it kicking and screaming. Greed and sloth has taken over American know how and reduced these companies to a bunch of crying babies who dont want to be responsible or plan for anything they dont like. Im sick of this and all thse folks whom have fought the health care that IS law and has been for years now still they do nothing. The HMO's are just as bad they havnt done anything they are too busy raking in the cash....it makes me sick because the American worker is who is suffering while these fat cats play games with our health care.

    July 3, 2013 09:32 am at 9:32 am |
  6. annieL

    Mr. McConnell, what are those "common sense" reforms Republicans want to replace Obamacare with? As I recall during the debate, the only "reforms" Republicans came up with were selling private insurance across state lines and tort reform, i.e, protecting doctors from liability lawsuits by patients they injure or kill. How does that make insurance affordable for low-income workers and the self-employed and the unemployed who lose their benefits with their jobs? I happen to think Obamacare was the wrong way to go because it keeps employers and profit-hungry insurance companies in control of most people's healthcare access and choices and is unnecessarily complex for all involved. But Republicans have NO ideas that even begin to fix the problems. Their only interest is in keeping their healthcare business buddies rich, and that includes doctors who are mostly Republicans. If Obamacare fails or if they succeed in repealing it, we can expect deafening silence from Republicans on healthcare access and affordability. You don't fool me with you "common sense," Mr. McConnell.

    July 3, 2013 09:32 am at 9:32 am |
  7. Jean

    What a joke . . . nothing left to say about this law or this president.

    July 3, 2013 09:33 am at 9:33 am |
  8. Les Wong

    In 2010 when Obamacare was up for consideration, Nancy Pelosi declared: "We Have To Pass The Bill So That You Can Find Out What Is In It"; and all the Democrats went along with her. Now we know what's in it! Is this how Pelosi and Democrats get their mortgages, signing up befor knowing what's in the contract?!

    July 3, 2013 09:33 am at 9:33 am |
  9. may40

    How convenient with the 2014 elections. Obama knows his garbage healthcare plan will backfire and he will lose the Senate if it were to be implemented in early 2014. What a deceitful wicked person he is.

    July 3, 2013 09:34 am at 9:34 am |
  10. Patrick

    Are some people just starting to find out what is in this law and getting scared?

    July 3, 2013 09:36 am at 9:36 am |
  11. Disgusted

    I am soo sick of the obstructionists who have a phobia about their tax dollar being spent to help someone else. ALL other developed countries have already done universal health care and have not collapsed into communism. The obstructionists are so conniving that they would do anything to under cut this health care reform rather than accept it as the law of the land. That's why there is an article just about every day now, mostly lies, about effects of the Affordable Care Act. So sickening.

    July 3, 2013 09:36 am at 9:36 am |
  12. mike Lake Orion Michigan

    Kill this crappy bill!

    July 3, 2013 09:37 am at 9:37 am |
  13. annieL

    Senator Baucus was right to warn the administration to do better at informing the public. Even those of us who have taken the initiative to inform ourselves have a hard time deciphering the law as it applies to individuals. But half of the blame for that also belongs to Republicans who have done everything in their power, at both the federal and state levels, to confuse us, scare us and focus on the negatives instead of the benefits. Republicans didn't do such a good job rolling out the Bush administration's Medicare Part D drug coverage, I recall. And they are the authors of the infamous "doughnut hole" that the elderly sick fall into when they need expensive drugs to keep them alive. The whole system is a mess that could be made simple if politicians put consumers first instead of businesses and providers.

    July 3, 2013 09:42 am at 9:42 am |
  14. acepaul

    Dont want to screw up those 2014 elections!!!

    July 3, 2013 09:47 am at 9:47 am |
  15. keltic1

    Delay = Breaking the new law already. Congress passed the law & the President signed it to start on time.
    Why can't this Admin. admit they are useless & can NOT plan for anything?

    July 3, 2013 09:49 am at 9:49 am |
  16. John

    Dem. Sen. Max Baucus is right this is going to be a train wreak. This bill was put together pooly and rammed down the throat of the people. Back room deals made and wavers given to get the votes to pass it and now to protect themselves for the mid term election putting off a key element of this bill really shows what a joke this administration is andf how stupid his sheep followers are as they continue to back this moron.

    This Bill was bad when it passed and it is still bad today but too many are too stupid to figure it out.

    July 3, 2013 09:49 am at 9:49 am |
  17. jblake

    He's thinking of the next election. I only hope his supporters wake up and realize his tactics for vote collecting, on their backs of course. He has got an awful heavy load of failed promises to wheelbarrow around.

    July 3, 2013 09:53 am at 9:53 am |
  18. Fred

    So now everyone is still going to be required to have health insurance in 2014, but employers are not required to furnish Health insurance. The government is going to force everyone without insurance to purchase their own?

    July 3, 2013 09:55 am at 9:55 am |
  19. Rudy NYC

    Hamlet wrote:

    Sure would have been nice for the entire congress to read the law before enacting it, working out these types of things and then passing the law. What a clown outfit.
    ------------------------
    Remember how they told all about the horrors that were inside of the bill. Care to take a guess as to what that means? I means Republicans knew exactly what was in the bill. They'd read it, and found a lot of lies that they could tell about it.

    July 3, 2013 09:56 am at 9:56 am |
  20. Joey Isotta-Fraschini ©™

    The House of Representatives needs a lot more Democrats. Things will be fine soon: elections are coming.

    July 3, 2013 09:57 am at 9:57 am |
  21. Just_One

    The democrats want credit for the concept of obamacare but they do not want the blame for the pain of the implementation of obamacare. Nothing more than a cynical election year plot.

    July 3, 2013 09:57 am at 9:57 am |
  22. jason

    Let me get this straight. The business provision for Obamacare doesn't go into effect until AFTER midterm elections? Why, Mr President? When, after all, isn't Obamacare this great and wonderful accomplishment? You have had 4 years to figure this out...why then is this great and wonderful thing being delayed. Oh because you know that this will affect jobs and in turn affect midterm elections.

    July 3, 2013 09:57 am at 9:57 am |
  23. Booger

    Apples and oranges.

    July 3, 2013 10:00 am at 10:00 am |
  24. jrl1234

    Its funny how they are putting this off until the mid term elections are over. The Dems don't even want to support their own bill.

    July 3, 2013 10:01 am at 10:01 am |
  25. annieL

    Long before Obamacare, many employers were already cutting fulltime positions to part-time and temp or contract positions to avoid paying benefits they voluntarily offered to fulltime workers. So what's the big deal about Obamacare? Why is it OK when businesses do it voluntarily to maximize profits but terrible when Obamacare does it? The real problem is that more and more workers can't earn enough money to pay for ANY health insurance, even if it's offered through employers, and when they get sick, the costs shift to all taxpayers or they go without care. The more people who have insurance, the more providers can charge with no controls. Insurance companies simply pass on the higher provider costs to insurance policyholders, forcing more low-income workers out of the insurance market, shifting more of their healthcare costs to taxpayers, in a downward spiral. Employer-subsidized insurance is the root cause of the problem because it masks the real cost of the insurance to the employee. It's not a "free" benefit. It is a part of total compensation to the employee and total labor costs for the employer.. The more insurance costs the employer, the less wages they can or will pay. No raises or small raises that don't even begin to match the rising health insurance premiums and deductibles and co-pays is the result.

    July 3, 2013 10:04 am at 10:04 am |
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