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Obamacare delay? Large businesses get a one-year reprieve

Companies with 50 or more workers were given a one-year delay in providing coverage for their workers or face fines. 'We have heard that [businesses] need the time to get this right,' wrote a senior White House aide in a blog post. 'We are listening.'

By Ricardo Alonso-ZaldivarAssociated Press / July 2, 2013



WASHINGTON

In a major concession to business groups, the Obama administration Tuesday unexpectedly announced a one-year delay, until after the 2014 elections, in a central requirement of the new health care law that many companies provide coverage for their workers or face fines.

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The move sacrificed timely implementation of President Barack Obama's signature legislation but may help the administration politically by blunting an election-year line of attack Republicans were planning to use. The employer requirements are among the most complex parts of the health care law, which is designed to expand coverage for uninsured Americans.

"We have heard concerns about the complexity of the requirements and the need for more time to implement them effectively," Treasury Assistant Secretary Mark Mazur said in a blog post. "We have listened to your feedback and we are taking action."

Business groups were jubilant. "A pleasant surprise," said Randy Johnson, senior vice president of the U.S. Chamber of Commerce. There was no inkling in advance of the administration's action, he said.

"We commend the administration's wise move," said Neil Trautwein, a vice president of the National Retail Federation. It "will provide employers and businesses more time to update their health care coverage without threat of arbitrary punishment."

But the delay could also undermine the law's main goal of covering the nearly 50 million Americans without health insurance. Already, Republican resistance in the states will deny access to a planned Medicaid expansion — at least for next year — to millions of low-income people.

Under the health law, companies with 50 or more workers must provide affordable coverage to their full-time employees or risk a series of escalating tax penalties if just one worker ends up getting government-subsidized insurance. Originally, that requirement was supposed to take effect Jan. 1. It will now be delayed to 2015.

Most medium-sized and large businesses already offer health insurance and the requirement was expected to have the biggest consequences for major chain hotels, restaurants, and retail stores that employ many low-wage workers. Some had threatened to cut workers' hours, and others said they were putting off hiring.

Business groups complained since the law passed that the provision was too complicated. For instance, the law created a new definition of full-time workers, those putting in 30 hours or more. It also included two separate requirements, one to provide coverage and another that coverage be deemed "affordable" under the law. Violations of either one exposed employers to fines. But such complaints until now seemed to be going unheeded.

There is no coverage mandate — or penalty — for smaller businesses. Also, for businesses of any size, there is no penalty if their workers are poor enough to be eligible for Medicaid.

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