Key Provision of Health Reform Law Delayed Until 2015

BY News Desk  July 2, 2013 at 6:53 PM EDT


President Obama’s signature on the health care reform law at the White House in March 2010. Official White House Photo by Chuck Kennedy.

The Obama administration announced Tuesday it is delaying the employer mandate portion of the health care law for one year, until 2015.

The law requires businesses with more than 50 employees to either provide health insurance or pay a penalty.

The administration said it was responding to employers’ concerns about the complexity of the law.

Read the explanation from the Department of the Treasury below:

Over the past several months, the Administration has been engaging in a dialogue with businesses – many of which already provide health coverage for their workers – about the new employer and insurer reporting requirements under the Affordable Care Act (ACA). We have heard concerns about the complexity of the requirements and the need for more time to implement them effectively. 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.

The Administration is announcing that it will provide an additional year before the ACA mandatory employer and insurer reporting requirements begin. This is designed to meet two goals. First, it will allow us to consider ways to simplify the new reporting requirements consistent with the law. Second, it will provide time to adapt health coverage and reporting systems while employers are moving toward making health coverage affordable and accessible for their employees. Within the next week, we will publish formal guidance describing this transition. Just like the Administration’s effort to turn the initial 21-page application for health insurance into a three-page application, we are working hard to adapt and to be flexible about reporting requirements as we implement the law.

For some additional details about the decision, we turn to Mary Agnes Carey and our partners at Kaiser Health News:

The Obama administration Tuesday announced a one-year delay in the Affordable Care Act’s requirement that businesses with 50 or more employees offer coverage to their workers or pay a penalty.

Administration officials said the delay was in response to employers’ concerns about the law’s reporting requirements. Delaying the law’s “employer responsibility” provision would give employers more time to comply and give the government more time to consider ways to “simplify the new reporting requirements consistent with the law,” according to a blog post from Mark J. Mazur, the assistant secretary for tax policy at the Department of Treasury.

Most of the employers impacted by the delay already offer coverage to workers, Mazur said. He added that the announcement did not delay the Oct. 1 scheduled start of the online marketplaces, or exchanges, or the subsidies intended to help individuals with low to middle incomes purchase coverage or the requirement that most individuals purchase coverage or pay a fine.

It’s unclear what effect the announcement will have on the health law’s goal of providing coverage to millions of American who do not now have it. Although many large employers do provide insurance, the benefits packages vary widely. Workers whose employers do not offer coverage, and now have an additional year to do so, will be forced to go to the exchanges to get coverage.

Employer groups were pleased.

“This one year delay will provide employers and businesses more time to update their health care coverage without threat of arbitrary punishment,” Neil Trautwein, the vice president and employee benefits policy counsel for the National Retail Federation, said in a statement.

Randy Johnson, a senior vice president of the U.S. Chamber of Commerce, took a similar tack: “The administration has finally recognized the obvious – employers need more time and clarification of the rules of the road before implementing the employer mandate. The Chamber has testified numerous times about the problems with the mandate, and we applaud the administration’s step to delay this provision. We will continue to work to alleviate this and other problems with ObamaCare.”

The National Federation of Independent Business, which unsuccessfully sued to overturn the health law, praised the announcement.

In a statement, Amanda Austin, the group’s director of federal public policy, said the move “is simply the latest evidence that implementation of this terrible law is going to be difficult if not impossible, and the burden is going to fall on the people who create American jobs.”

Democratic lawmakers and some of the law’s strongest advocates were slow to respond but Adam Jentleson, a spokesman for Senate Majority Leader Harry Reid, D-Nev., said in a statement, “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.”

But Republicans pounced on it, declaring it further evidence that the law will cost jobs and increase health care costs.

“This announcement means even the Obama administration knows the ‘train wreck’ will only get worse,” said House Speaker John Boehner, R-Ohio. “This is a clear acknowledgment that the law is unworkable, and it underscores the need to repeal the law and replace it with effective, patient-centered reforms.”

Sen. Orrin Hatch, R-Utah, the ranking member of the Senate Finance Committee, noted the delay takes the issue past the 2014 congressional elections. Hatch also said the fact that the administration was not also giving individuals or families a one-year extension from coverage requirements “shows how deeply flawed the President’s signature domestic policy achievement is.”

In a White House blog post, Valerie B. Jarrett, a senior adviser to President Barack Obama, said the delay would give employers time to test the new reporting systems and make any necessary adjustments to health benefits. She said the administration has changed implementation details before, noting that it previously decided to simplify its original exchange application from 21 to three pages.

Staff writer Phil Galewitz contributed to this article.

Kaiser Health News is an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communication organization not affiliated with Kaiser Permanente.

Check back soon for further analysis from the PBS NewsHour.