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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This is just the first step in turning our country into a socialist state
Give big business another year so that they can figure out how to find loopholes so that they do not have to provide good comprehensive insurance for all of their employees..... both parties are totally corrupt!
2014 election year gimmick
Thought this "ObamaCare" was going to be easy?
implemented by the TRUSTWORTHY IRS...that's going to end well
just don't understand why so damn expensive, you can't blame a co. and if they have preexisting problems, its' even worse. I understand it costs a lot to become a dr. but we should not have to pay their med sch. bills either.
How convenient to change the law to avert an election disaster next November. Well done Mr Obama, well done.
He means that it's bad for big businesses that will now have to provide health insurance to their minimum wage workers.
That's all this is. Whenever someone complains that something it bad for small business, it usually means that it's bad for big business that makes most of their money hiring cheap labor.
The whole nation is being forced into part-time and temporary employment. These politicians are clueless.
As a young, healthy 29-year-old working professional, why has the burden of this massive healthcare mandate placed on the shoulders of others like myself?
how convenient that this disaster won't take effect until after the midterm elections
Hahahaha, more like dems don't want to screw up 2014 with how aweful obamacare is
It's all about politics and the 2014 elections. This man in the white house is a complete joke.
Just a coincidence that it will be enacted after the mid-term elections. Dems don't want to be associated with this when plans are dropped and people finally realize what's going on.
The announcement posted on whitehouse.gov seems to say that "reporting" will be dalayed, not implementation. The intent is to give businesses more time to test their reporting before being subjected to fines. Please fact check this.
This doen't look good. It should happen in 2014 however complex it has been. They were given enough years to do start this. I don't know why Obama and his administration bending towards corporations. His signature law should be enforced in 2014.
Not a huge shock to us business owner and that time and time again we have told you so Democrats!
So where are all of the funds that are being collected from taxpayers, health care customers, vet visits and MediCare going to support AHCA execution in 2014?
Waste, waste, waste.
Call me a cynic, but I believe there is a purely political reason this is being delayed until after the 2014 mid-terms.
oh crap...they just read the bill and will need another year to figure it out....
Obamacare is a halfmeasure at best. It doesn't address the real problem with healthcare, skyrocketing costs. The only solution is a single payer system, but if the democrats aren't going to step up to the insurance companies, I know for the republicans never will. We're going to get killed by our own healthcare system...ironic in a way.
Why 2015? Because it is shortly after the midterm elections.
The public didn't ask for it, the Democratic leaders just decided it was in all of our interests. Typical Dem's they always know better than us lowly, non-entitlement, tax payers! Those of us who make make a buck already pay 90% of all the taxes, but we are told we don't pay our fair share. What is fair?100%?
Obama and the democrats FEAR the devastation their plan will have on SMALL BUSINESSES
Complexity of the reporting?
Put an extra line on the tax freaking return:
Did you provide health insurance to your employees? Yes (check here) No (check here).
If you check "no", then you have to file additional forms.