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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Train wreck is the appropriate term.
Done drinking the Obama kool-aid??
What behind this? The need to have more healthy individuals on the exchange.
What... a problem with obamacare? no way.
Republicans are ALWAYS saying People should take PERSONAL RESPONSIBILITY for their lives, and when people are no longer getting a free ride in healthcare, Republicans scream and holler that people should NOT be required to take PERSONAL RESPONSIBILITY!
DO YOU THINK THE REPUBLICANS ARE CONFUSED MUCH?
Know of at least two business's myself that have layed off workers to get under the 50 person cap.
One had had plans to add workers. They're down from 52 to 49, and offering overtime.
Cheaper for them that way.
There is much about this law I support, but this provision is not one of them. The critics have it wrong, its not that business will stop higher after 50 people, its that they will stop higher full time before they hit 50 people. Continuing to worsen the underemployment situation in our country. The approach we take to healthcare is so piecemeal, such a patch work of compromises and half measures it's no wonder the system is a mess. At this point we should either move to some form of real universal healthcare, or just stay the hell away. With every small alteration, we just make more problems to solve down the road.
So they are trying to postpone until 2014 election???
No surprise here. I dislike Obama for other reasons but this just smacks of incompetence. They wrote it but can’t figure out how to implement it?!?
Clinton was correct – single-payer is the best way to go. Expand Medicare coverage for all Americans. Anything else is just a give-away to the big insurance companies and hospitals.
business already have to report health insurance information due to medicare, so this is no different. all organizations should be required to offer health insurance [regardless of hours work or if regular employee, or number of employees], it is similar to 401k, they do not have to contribute, just pay administration costs [as long as insurance company does not require employer to cover percent]. of course cobra is a pain though. already received notice from insurance company that the premiums will increase due to taxes required from this act, think over 3%. as usual, corporate controls government, not the people. as administrator, i have received no information regarding any requirements or regulations. somehow we are just supposed to know everything, such as new i-9 form released, which will have to be updated if immigration bill passes because e-verify, which should be required anyways.
This whole thing is a sham. Delay it infinitely!
Good. A small cloud of sanity has blown over Washington–at least for the moment.
And so the Obamacare disaster continues to crumble.
In a stunning move, the Obama Administration bolstered its chances of not getting stampeded in the mid-term elections. This would have been the death knell for the Dems, in the mid-term elections, had this awful piece of legislation been allowed to be fully implemented.
Another stunning Obama success story... LOL
Wow, that will like totally miss the 2014 elections. WHAT A COINCIDENCE!
How about we just get rid of the whole thing? I don't WANT to buy personal health insurance! Why should the government be allowed to make me purchase something I don't want? I will never understand how we let this happen.
Continuing evidence of the abject dishonesty, incompetence, and arrogance of The Emperor Rufus and his gang - but hey, we already knew that....didn't we.
Obamacare health reform
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?
Business owners concerned about money not employees? This is why we should have nationalized healthcare. Employers shouldn't be bearing this burden to begin with and is costs Americans jobs. The GOP and Lieberman created the mandated insurance scam, time to bring back the pubic option Obama started with.
Looks like a mid-term election ploy. I wish the new came a little sooner before employers cut hours to 29/week!!
Well what do you know. I could have told you this would happen.
This bill is a joke-this administration is a joke.
Bad news. Sebelius needs to be replaced and then her boss. Let's elect a real democrat in 2016.