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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Let's not forget that this delay means ANOTHER year of taxes raised without the benefits! We were already due for 10 years of taxes for 6 years of coverage now we're down to 5 and 5!
Why are people scare of this ?
Tee-hee. a comedy of errors......tee-hee
Great news, now the government can try to learn how to roll out a plan that won't cost citizens more than they are paying now and not penalize them with fines if they chose not to be covered. Maybe they will come up with a plan like congress has for everyone, where you will get quality care at a reasonable price.
This is just obama trying to hide the truth from the people before the midterm election.
Boy me and my fellow accounts are sure making big money of the public's stupidity. While were at it can we ban mayo i so want to sell it in black market
These businesses are just looking to get out of having to provide health care. It won't work. They should be providing health care or be severely punished. Don't question our fine president's actions. He is the greatest president ever.
Bad news for Republicans in 2014. This disaster hitting in 2015 will simply give the Dems a reason to blame the ill effects on the Republicans.
Oh let's be honest. The delay came because next year is the mid-term election cycle. If the provision went into effect along with all of the others, Democrats would be voted out of office en masse. Of course, they still should be, along with most of the idiot Republicans too...
This thing is a train wreck from beginning to finish. It's all starting to unravel now...
So people who don't have insurance have to pay a penalty, but businesses get off the hook for a year. CLASS has been abandoned, the Small Business Exchange has been delayed a tear, and now the big business coverage has been delayed a year. Seems as if this law wasn't very well thought out and the train may be going slower, but it's still headed for derailment. Sebelius should have spent more time on supervision instead of making phone calls for Enroll America.
That's just POLITICS!
He wants to put it OFF until after the mid term elections.........as USUAL!
As the owner of a small family business, I'm looking forward to the opening of the national insurance exchanges at the end of this year. Health insurance premiums (for basic, catastrophic health insurance) currently eat up nearly 10% of my profits. With the current estimates from my state, it looks like Obamacare will reduce my premiums by about 15% a year, and I'll actually get better coverage for my money.
Business always whines that things are too difficult for them, they aren't ready, it's not fair... you name it, they have a whine for it. Any delay in the Affordable Care Act impacts ordinary people who were expecting to have insurance soon. Sure, they'll whine too, but it will be drowned out by the business community.
This is really about dems learning in 2014 an election year, millions of people will find out what their companies will pass on to them and not be happy campers. Its about saving dems from being run out of office.
It really won`t affect very many companies, just those that have about 50, 51, or so employees. If they don`now oofer healthcare, they can just lay off one or two people.
Because all the people with common sense knew obamacare was a buggersnot pile of increased taxes.
I have a feeling the 2014 elections have something to do with this decision.
If you will send me an email to my box I will verify my address so that you can post my comment- either that or delete the first and I will resend with the other name
I can certainly appreciate the reservations in making health care mandatory for small business when the economy is just starting to come out of a stall. In countries like Canada that have a socialized health care system which means everyone who is a resident is entitled to health care. This includes surgeries, physiotherapy , maternity, cancer treatment Doctor visits, really the only thing excluded would be cosmetic surgery. The cost is covered by *hidden taxes*. Say for instance the taxes on gasoline purchase. Maybe 40 cents of every dollar is allocated to cover healthcare costs. Canadians pay more for everything like milk and gas. Each Province like each State is responsible for how they spend the money. It is not a perfect system but it does work for most people. Medication costs have special programs for seniors and lower income. In Nova Scotia, children are covered for dental care. How high are the taxes here? Middleclass bear the brunt as they do in the States.
Delayed until 2015, after the midterms. Democrats are delaying the most devastating part of Obamacare until after the midterms so they can regain a super-majority and pass whatever they want.
I'm glad the average person has a voice in the white house. It appears that everyone else is being exempt from taxes and mandates but the "us" the average person that pays taxes and is not on welfare. Maybe if those representatives that vote for this bill read it and had a clue about the complications involved in implementing such a large overhaul of the insurance industry we wouldn't see these problems.
What a joke, the dems want to put it off until the next election, they know they are doomed if it goes into effect, heck they really want to delay it until 2017....this whole thing is a joke the govt should let private industry take care of health care!!!!
We need to get this clown out of the W.H. and back to the circus.
If major corporations in US are already providing healthcare for their workforce, why then are the Repubs hysterical with the idea. To have a healthy workforce in any corporate activity automatically translates to the corporate health. If healthcare to workers is properly managed, the overall benefit to the corporation is immeasurably positive.