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 has nothing to do with time. This law is job killer and Obama wants to have jobs numbers before he leaves office and thus letting the next president deal with the mess he created.
Awesome! Private citizens, forced to buy insurance from private companies, companies not forced to provide insurance for employess!?!? So much for team work, BroBama! If the idea was that health care would get affordable...by forcing everyone to have insurance (which actually does nothing to address the cost of medical care-just who pays for it), but now, corporations don't have to comply, how is that going to work?!?
Thats why employers will hire Part-time workers or temps instead. The people who are struggling to make ends meet will get temp jobs instead and hope that they don't get sick coz they can't afford it. Great job!
Hey business owners why don't u think of somebody other than yourselves like oh ya how about your fellow man!
Requiring businesses to provide healthcare is burdensome. They should just charge businesses a tax based on a percentage of revenue and that would be used to subsidize individuals purchasing their own plans on the exchanges.
like we did'nt see something like this coming?...well those with a brain anyway...and you know there;s more bad news to come...affordable my aunt fanny!!!
Repugnicants just hope to delay, obfuscate and hinder this as much as possible to avoid it from helping people. The House keeps voting against it to keep it fresh in everyone's minds and "on the table." Their dream is to take back the Senate so they can overturn it and a veto if necessary if the Democrats win the Presidency again.
"The delay came after business owners expressed concerns about the complexity of the reporting requirements, the agency said in its announcement."
Complexity. We are going to delay implementation of an important provision of the new health care law because businesses - who, by the way, hold 3+ trillion in cash reserves and who refuse to invest that money in their own and America's economic future - and who hire more lawyers than the RNC - complained about "complexity". What is this, the Twilight Zone?
why did he half to name it after himself? Why not Americare? or something. I mean i voted for the dude and do think he's done just a good a job as any president but i am bothered by this narcism & come to think of it that's probably why the republicans are too!
And the rich get richer! I'm about to give up on Obama, good ideas and policies, but no backbone!
Sneaky. Delay the implementation to avoid the job loss and financial impact the year of the mid term elections. Well played my friends, well played.
LOL that MSNBC reports nothing of this Obama Care mess!! His administration needs another year for this misery on Americans LOL Why because this will cost voters BIG BUCKS!
Yeah, postponed for a year because the dems can't afford having their sheep impacted/laid off due to their signature accomplishment at mid term time, so they're postponing it for a year, then your screwed. You've been played so hard Long with everyone else your ignorance is going to impact. Sheep...
This "affordable care act" a.k.a. obamacare is really falling apart.......good!
They should redo a lot of this bill They talk so much about preventing and care of diabetes .Yet they are ending payment of the test for pancreatic.cancer. because it is a expensive test.All the while we blow money in dumb wars and send big bucks to Africa
I wish they had to watch a loved one die of pancreatic cancer.maybe they would realize this is a needed test.
Postponed past the midterm elections, how convenient.
my current employer has 75 employees and does not provide health coverage, im a healthy 28 year old male and do not carry health insurance, now I'm required to have coverage, while my employer does not have to provide it, just another example of the government caving to the corporations and companies, while screwing the middle class
Our leaders need to sit down and work out this part of Obamacare. Right now Sen. McConnell is doing everything he can to stop the different portions of this bill. I do hope that everyone recognized just how much it costs us to keep Sen.McConnell and others in the Senate. Besides their salaries they get about 1 million or so to staff the offices, to furnish the offices, etc. The "Senators pay about 28% of their medical insurance costs. We the people pay the other 74%. When he gets sick he can go directly to Bethesda Naval Hospital to be seen by physicians there, Can you do that? Do you have money to staff your business.or to pay your whole medical costs.
We need to be told the truth. We need the leaders of the House and Senate to realize that healthcare is a necessity. These leaders also need to work together to make the Healthcare initiative work. Make the changes that will make it better. The AMerican people deserve to have healthcare that is as good as the care provided to members of Congress. Nothing less will do.
Foot dragging on the part of Business. Business has raised blaming the government programs for all their ills. It is sloppy unresponsive management. These are the people consumers trust to provide goods and services.
Compile you lazy bums
half baked half cocked ideas always crash and burn, hasta la vista OBAMA CARE!!
arrivedercci OBAMA CARE!!
There's an election in 2014. Call the IRS!!!
thats' what happen's when you put a community organizer in charge!!
Smart political move by Obama to help in the 2014 election!
don't open comments on this story cnn. it may make you look bad for supporting Obama and his disastrous job killing policies.