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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And so it begins: a couple thousand pages that was not understood when passed and now becoming too unwieldy to implement. Pelosi's quote should be changed to "We have to pass it so we can figure out that we can't implement it."
CNN is wonderful- does this make you happy bunky?
Obama just delaying the train wreck until after the 2014 elections. For the funny side of Obamacare click here. You will laugh yourself sick........
If you are a person needing affordable healthcare this news is bad. If you are a greedy corporation, this news is good.
Well, this is nice. The exchanges are such a good deal, that most lower end-middle class folks are far better of on the exchanges than shelling out a lot for their % of employer coverage.
I didn't know that the dept. of Treasury could re-write laws. That would make them the most powerful agency in the government.
just like in communism... what you can select is mandatory
Of the only 3% of small businesses that will now need to provide health care, only 4% of them don't already. That leaves only 1% that must change due to this mandate. This is not going to hurt small businesses.
Americans fight back against big wealthy owners!!! They are ROBBING all of us excePt their political friends repubs and dems alike who only help push their agenda!!!! Do no let them hurt us because of their narcisstic greed!
So if the company mandate is gone but I work for a company with greater than 50 employees.. am I still personally responsible?
Does my penalty, as someone who can't afford insurance right now, get pushed off for a year too?
Like anyone cares about what business thinks.
This was put off so the 2014 elections wouldn't tank for the Dems because of the pain Obamacare will bring.
If they were so supportive of this law, why wasn't it put into place immediately, instead of just wasting time and money for years getting ready for it.
Obama proves he is capable of being just as intransigent as Bush, it's his way or the highway.
What a disgusting political ploy.
More like Obama and Democrats concerned about mid-term elections. What a joke.
How much time have they had to prepare for this?
Nope, this is a ploy to make an issue of this during the 2014 midterms. Just once I'd like to see a national election that's run with honesty and dignity. Just once.
Even Obama doesn't believe in Obamacare. Pretty cynical and self-serving bunch.
The primary reason for this delay is to help Democrats in next year's election. To those in Congress who supported it, voting for Obamacare was like putting on a tire necklace. This just delays the inevitable flame that will set those necklaces on fire.
Well, this is nice. The exchanges are such a good deal, that most lower-end middle class folks are far better off on the exchanges than shelling out a lot for their % of employer coverage. We do not actually need an employer mandate. Shifting healthcare costs to the fed gov is like a big tax break for businesses and one reason some businesses go overseas (because other countries provide heath care for their workers)
The bottom line we simply need Universal Healthcare that covers every human soul in these United States of America because caring for health concerns is a basic human right rather than a privilege as some have stated. Those latter individuals believe in the motto: Live and Let Die. On the surface, this sounds a great movie title, but when it comes to real life, let's be realistic: Wouldn't we want to treatment any ailment prior to having it manifest itself in a human being whereby costing much, much more to treat, and we all end up forking over the cost difference through our healthcare rates that patient(s) can't afford to pay over time ?
This comes as no surprise. This is a bad law, written poorly and never read. Yet the low income blacks and illegals support it because one, they are less educated and two, are the ones getting services I and everyone else have to pay for.
you mean there issues with this unconstitutional health care law oh what could they be. once the tax paying public really figure out What's in the bill there will be lots of problems.
So his party can dodge the political fallout of their own program during the 2014 elections. And we're going to fall for it.
that should be enough time to impeach him...
I agree with the last part of the article, saying that the administration has done a pss-poor job promoting the benefits of the law. Right now, the only messages about Obamacare are coming from mouth-foaming zealots screaming at the top of their lungs that the law will take your job, destroy America, and eat your children.
Aside from that, a delay in implementation may not be all bad. Giving businesses more time and help to adjust to the new law is a good thing.
The simple solution is to just include in on the W-4 form employers provide to each employee for each year of taxes. Most companies already do this. Put the requirement at 50, but have the IRS only fine companies if 65 is hit in a single year or they don't provide insurance in the following year. This way there is some flexibility for companies that are growing.
People will continue to die from the Republican fillibusters, until we all pay Big Pharma and Big Insurance what they demand.