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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While employees lay dying in the streets...
Is anyone surprised? This colossal program is delayed because IT IS A JOB KILLER. We have seen the business effects in my neighborhood over the last 3-4 months... many low-wage employees cut back to under 30 hours... reduced hours of operation, anything to keep businesses under the penalty threshold
“The administration has finally recognized the obvious – employers need more time and clarification of the rules of the road before implementing the employer mandate,”
But the administration has yet to recognise the obvious, that the only people who like it are would-be free-loaders and Democrats who benefit from pandering to free-loaders.
More foot-dragging while millions are forced to go without health insurance.
Most Americans are just one illness from bankruptcy.
Wow. Just when I thought CNN couldn't be anymore in the tank.
Funny how this story fails to mention that sources inside the Treasury Dept are saying this is all about delaying implementation until after the mid term elections. Insiders know this is going to be a train wreck and they're now scheduling it around the election to deceive the American people. ...again.
Wow. Perfect political ploy to miss the 2014 elections.
What a cowardly act, wait until after the 2014 elections to unleash this disaster on America. Another new low for President Obama!
Employers shouldn't have to offer health insurance. They don't pay my homeowner and auto insurance bills. Pelosi said that the ACA was going to be great because insurance won't be tied to a job.
So when push comes to shove the administration simply folds. Why did they even waste their time with this. Canada can do it, we are too simple minded
I can hear the conversation now...."Hey, lets hold off another year as we convince our clueless voters to vote a few more of us in, then we will make them pay". Please wake up America. We have become the laughing stock of the world.
ObamaCare is a failure. A failed promise and disaster for Americans!
let the train wreck begin
Of course Republicans- let's do what we have always done- let the insurance companies and the hospitals and medical community charge what they darn well please. That's what has driven the costs up every year to its present back breaking level. And as for those 30 million without coverage well it's all their fault obviously. No skin off our republican hides.
What?? I thought the Affordable Care Act was supposed to be beneficial to everyone? Why just stop one mandate? But then I guess thats what happens when you push a bill through without reading the whole thing.. Thanks Democratic Congress!
a soon as obama gets tossed his ridiculous healthcare bill wll be right out in the street with him..
Obamacare is going to be a complete disaster.
If Obama care is supposed to be so good, why the 1-year delay? FAIL!
How about a report on all the business that are cutting people who HAD full time jobs, down to part time status. I am seeing this first hand with some major employers. So now in addition to being the working poor we are also getting our hours cut by employers who do not want to participate in Obamacare, and then we will be subject to fines as individuals for not complying with regulations. Who thought this was a good idea?
Who would have thought this Obama screwup would be delayed?
awesome news. that should keep teh US out of bankruptcy for at least a year.
So, in actuality what has happened is that the implementation of this has been put on hold until after the 2014 election. Smoke and mirrors. So tell me .... what happens to the employees that can't afford health insurance ? What happens to the people who work hard every day, but because they work for minimum wage can't afford health care ? Obama Care is pure garbage, everyone knows it and it was just put on hold so as to not interfere with the 2014 election. Do our politicians really believe that we are so stupid ? It's time for the citizens in America and say "Enough is Enough" When the people we elect seem to not even care, lie with a straight face to us, and yet continue in their wasteful and sometimes even illegal ways...... then it is time for us to step up to the plate and do something about it.
D us president should low d tax of citizens&increases industries tax
and the unraveling begins
the first in a long line of set backs for a system designed to fail.
I knew this would happen. What a joke. This president is like all the rest, false promises.
It's bad enough we settled for this crappy version of Obama care but know they can't even implement it on time.
This is the change I voted for twice? Even most liberals were not happy with this watered down version of Obama care.