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. 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 we continue to let people suffer? If this is a political concern having to do with the midterm elections, are votes being bought with the suffering of those who have no health care?

    July 3, 2013 10:05 am at 10:05 am |
  2. Freedom Storm

    Political move undoubtedly ... delayed until after the 2014 election, this defrays the cost of lost tyranny seats in congress.

    July 3, 2013 10:07 am at 10:07 am |
  3. Matt T.

    Completely party politics-driven move. The Socialist Party knows that this will result in hundreds of thousands of layoffs and will quench any so-called "recovery" that's happening now (mostly part-time jobs, temp jobs, jobs without benefits or jobs which are well below the applicants' skill sets and salary ranges) so they're just stalling it so that there won't be any backlash from the indiscriminate buffoon suckers that like to cast their (multiple) votes in favor of more "free" gubmint cheese.

    This move is simply an admission that this provision is going to do enormous damage to the economy – something the administration has been denying since Day #1 (before Day #1, actually...) De Nile ain't just a river in Egypt guys.

    If you think health care is expensive now, just wait until it's "free".

    July 3, 2013 10:07 am at 10:07 am |
  4. Mike

    Big shocker, implementation to be delayed until AFTER the next election. Can we really be this ignorant?

    July 3, 2013 10:07 am at 10:07 am |
  5. BinFL

    As with any big legislation there will be bumps that need to be ironed out and they will be as time goes on. However, the Repubs and their continuous whining about Obamacare needs to stop as they have absolutely no solutions for any of our problems. If there is something in Obamacare that they feel they can implement in a better way then put it out there. Otherwise, they need to shut up and stop with all the negativity. They are absolutely worthless!!

    July 3, 2013 10:09 am at 10:09 am |
  6. Mick

    To Cat Mcshane. Because if you get very sick us taxpayers have to pay for you! That is why!

    July 3, 2013 10:12 am at 10:12 am |
  7. Rudy NYC

    MJ wrote on page 4:

    No surprise here. Does anyone actually know what the cost will be for an individual to sign up for Obamacare? Where is the form? Where are the disclosures? Where is the IRS?
    -------------------–
    If you live in a red state, don't worry about it. It will not be available to you. Republican governors are making sure of it.

    July 3, 2013 10:15 am at 10:15 am |
  8. annieL

    Employers should not be the gatekeepers to healthcare for Americans. Period. They should provide paid sick leave for workers who are too sick to work and that's all. To put a whole healthcare system on the backs of business owners and expect business to provide full employment is crazy. But it's a burden and responsibility they took on themselves voluntarily when they added health insurance benefits and employees came to expect it. It is really up to those same businesses to say, "We want to be free of this responsibility and cost. Let government do it."

    July 3, 2013 10:15 am at 10:15 am |
  9. brian in dc

    The individual is still responsible for the penalty, just not business. This will add to the already way underestimated costs of this horrible legislation.

    July 3, 2013 10:17 am at 10:17 am |
  10. pandora

    This just paves the way for full repeal after the next election

    July 3, 2013 10:19 am at 10:19 am |
  11. dfb69

    And BTW, we were paying 10 years of taxes for 6 years of service so Obama could cook, er, I mean, "balance" the books. This moves means we will get 5 years of service for 10 years of taxes

    July 3, 2013 10:19 am at 10:19 am |
  12. edirol

    to Ulysses-AZ . It's not fair to blame the Patient Protection & Affordable Health Care Act for local business owners cutting back work hours. I worked at both Walmart and Walgreens 2008 – 2013 and they both cut work hours from 32 hours to 20

    July 3, 2013 10:19 am at 10:19 am |
  13. Jesus

    neal

    why did he half to name it after himself? Why not Americare? or something. I mean i voted for the dude and do think he's done just a good a job as any president but i am bothered by this narcism & come to think of it that's probably why the republicans are too!

    ___________________________________________________

    Neal – The official name of the program is "Affordable Care Act". The right wing labeled it Obamacare thinking it was a negative and the POTUS embraced it afterwards

    July 3, 2013 10:23 am at 10:23 am |
  14. Guest

    Notice how CNN is downplaying this. We are so hosed.

    July 3, 2013 10:24 am at 10:24 am |
  15. Rudy NYC

    ikt wrote on page 8:

    Awesome! Private citizens, forced to buy insurance from private companies, companies not forced to provide insurance for employess!?!? ... ... ...
    --------------
    Awesome! Women in several states are now required to pay for unnecessary medical procedures prior to an abortion. For all of the screaming the right did about government forcing you to buy something, the hypocrisy in making women pay for ultra-sounds, trans-blah this and trans-blah that, is simply astounding.

    July 3, 2013 10:26 am at 10:26 am |
  16. heh

    How many people will die because of this delay?

    July 3, 2013 10:27 am at 10:27 am |
  17. TimeBandit

    As someone who believes that health care in America needs an overhaul I have always wished Obamacare the best in fixing this problem. However, as strictly a political observer I believe its implementation both in the political landscape and its real world application are destined to fail. I am manager at a company who had 57 employees when I started; over the past year we have steadily reduced those numbers to be under the 50 threshold for 2014 reporting. The company has never provided health insurance to employees but does provide stipends for employees to purchase health care on the private market. We are in hiring freeze right now, while we are servicing out existing contracts we are not pursuing others that would require additional hiring. While talking with the owners this morning about the delay on the employer mandate to 2015, it was decided that we will continue to keep employment under the 50 threshold for the time being. The main thing here is we just don't know whats going to happen when it is implemented. Its almost bad that its pushed back because it just means another year operating with uncertainty about what we may need to do to grow in the future.

    July 3, 2013 10:29 am at 10:29 am |
  18. CJB

    My insurance premiums already went up 46% and my business is not replacing employees due to Obamacare. This has been a train wreck waiting to happen and the libs are just delaying this so that they have a slim hope in the 2014 elections.

    July 3, 2013 10:31 am at 10:31 am |
  19. Angel

    this comes far to little far to late. like many my hours have been cut in half by the higher ups after bills i have 50$ for food, yet, some how i make to much for food stamps. How is this helping me? its not. i cant even afford gas to drive to work i walk and hour to and from. how am i supposed to afford health insurance? even at a discount with my hours cut below 30 a week i can barely afford to eat let alone actually live.

    July 3, 2013 10:31 am at 10:31 am |
  20. daniel

    Figures. Lets put this one off until after mid terms.

    July 3, 2013 10:32 am at 10:32 am |
  21. Cat

    Seems a little on the communist side...forcing people to do what the ruler wants them to do. What is amazing is the people that put their blinders on and think it is wonderful just because who is trying to push it. Wanting a legacy to leave behind with his name written in the name of the health care, be great if it failed. What a legacy that would be! Also I agree with roger's comments on July 2nd at 7:54.

    July 3, 2013 10:32 am at 10:32 am |
  22. 1termlimits

    CNN you had this important headline on your "TOP STORIES" Now it's buried under "Health". Nice Try!!

    Can you crawl any deeper into Obama's pockets?

    July 3, 2013 10:38 am at 10:38 am |
  23. John

    Funny how some are claimning that Employers are trying to keep worker below the 50 so they do not have to take on the added cost. Many of us have been warning about this from the get go. Are people blind and stupid? Business are trying to make ends meet they are not going to take on added Government cost that will hurt their business. No bussiness man in his right mind would do so. This is a weak economy they can't afford this massive cost.

    July 3, 2013 10:39 am at 10:39 am |
  24. smallbusinessowner

    i have a business model of finding run down motels and turning them from crime havens to respectable establishments. I provide jobs to more than 50 employees, most of which are very low skilled. I pay them $9 or more per hour and since my establishments are 24 hours they are often employed to just monitor the property.

    I get hunnndreds of applications for the jobs i put out there.

    problem is, if i had to provide health insurance the cost of providing health insurance relative to my current employee cost is too high. When you are providing health care costs to someone making $70k percentage wise is very different vs someone making less than $20k a year.

    unfortunately if this actually goes into effect, the business model isn't as attractive for me as an investment return. I would deploy my capital elsewhere where it makes more sense. Some of you might say that I am just being greedy but the fact is..that is how the market works. I am in this business to make money to provide a better future for myself and my family and at the same time I am improving the lives of the neighborhoods where i remove the blithe of these crime ridden properties, and provide funds for mainly college kids (my younger employees), and decent wages to provide for their family for my managers.

    July 3, 2013 10:44 am at 10:44 am |
  25. REPUBLICAN ARE THE GREATEST

    If it is so great why delay it. Because it is a cancer to the Democratic Party. Lets wait until after the 2014 elections then we can screw the American Public. Obama Disaster Care must be shredded and never be mentioned again.

    July 3, 2013 10:44 am at 10:44 am |
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