The administration of US President Barack Obama said on Tuesday it would not require employers to provide health insurance for their workers until 2015, delaying a key provision of Obama’s healthcare reform law by a year, to beyond the next election.
The move raised questions about the future of other provisions of the law, including the mandate for individuals to obtain health coverage next year, and followed widespread complaints from businesses and their lobbyists about reporting requirements for employers with 50 or more full-time workers.
Retailers and other business interests welcomed the change, which analysts said could stymie a main avenue of attack on Obama’s signature domestic policy achievement as campaigning for next year’s midterm US congressional election gets under way later this year.
Republicans called it evidence that Obama’s plan was a failure, while Democrats termed it a demonstration of flexibility.
Whether that flexibility opens the door to further changes in the healthcare law is now a matter of debate. The law, known as “Obamacare,” was passed in 2010 and upheld by the US Supreme Court a year ago.
Companies would have had to pay the US Internal Revenue Service US$2,000 for each full-time employee who did not get health coverage, beginning on Jan. 1 next year, when the Patient Protection and Affordable Care Act is scheduled to come into full effect.
“This is designed to meet two goals,” Mark Mazur, the US Treasury Department’s assistant secretary for tax policy, said in a government blog. “It will allow us to consider ways to simplify the new reporting requirements consistent with the 2010 law. Second, it will provide time to adapt health coverage and reporting systems, while employers are moving toward making health coverage affordable and accessible.”
Edward Lenz, senior counsel of the American Staffing Association, an employment and recruiting industry group, said administration officials briefed his organization on Tuesday afternoon, portraying the delay as a “practice year” for businesses.
“In our conversation this afternoon with representatives from the administration, they are expecting employers to voluntarily go forward with these rules,” he said.
Trade groups representing retailers and restaurants, among those expected to be hit hardest by the mandate, welcomed the one-year extension.
“We commend the administration’s wise move,” National Retail Federation vice president Neil Trautwein said. “This one-year delay will provide employers and businesses more time to update their healthcare coverage without threat of arbitrary punishment.”
Some analysts saw the change as a responsible move to accommodate smaller businesses. It could also help the public education campaign to persuade the uninsured to sign up for coverage.
“It takes away one of the potential sources of criticism and frankly negative stories that were likely to materialize in the fall,” said Larry Levitt of the nonpartisan Kaiser Family Foundation, which tracks healthcare issues.
Republican lawmakers seized on the announcement as evidence the healthcare reform they have repeatedly sought to repeal represented a flawed administration policy.
House of Representatives Speaker John Boehner said the administration should now provide relief to individuals who face a penalty if they do not obtain health coverage by next year..
“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,” Boehner said in a statement.
However, Adam Jentleson, a spokesman for Senate Majority Leader Harry Reid, said the change would help make Obamacare as beneficial as possible by allowing the administration to work with business stakeholders.
“It is better to do this right than fast,” he said.