WASHINGTON —The Obama administration announced Tuesday it is delaying
until 2015 the requirement that businesses with more than 50 employees
provide health insurance to their workers or pay a penalty.
The announcement by the Internal Revenue Service comes after numerous
complaints from businesses that the requirements were too complicated
and difficult to implement in time.
Business groups, such as the National Retail Federation, praised the
delay, while congressional Republicans jumped on the move to reiterate
their opposition to the 2010 health care law.
Other key parts of the law, including the health exchanges where
individuals can buy insurance, are on schedule. The exchanges will
open on Oct. 1, wrote Valerie Jarrett, a senior adviser to President
Obama, in a White House blog released Tuesday.
The delay also does not change the individual mandate, which requires
most Americans to purchase insurance. Some consumers may receive
subsidies to help them pay for the insurance depending o their
incomes.
Jarrett said the move is a sign the White House is paying attention to
the concerns of business.
"As we make these changes, we believe we need to give employers more
time to comply with the new rules," Jarrett wrote. "Since employer
responsibility payments can only be assessed based on this new
reporting, payments won't be collected for 2014."
"We have heard concerns about the complexity of the requirements and
the need for more time to implement them effectively," wrote Mark
Mazur, assistant Treasury secretary for tax policy, in an IRS blog.
"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," Mazur said.
The delay gives the IRS more time to simplify reporting requirements,
as well as for businesses to get up to speed with reporting systems.
The government still encourages businesses to voluntarily begin
reporting in 2014 so they will be ready for 2015.
Business groups had argued for months that the law created an
administrative burden for businesses as they tried to update
technology and plan to offer health coverage to their employees
without knowing how much the coverage would cost.
Businesses with more than 50 employees would have paid a fee of $2,000
per uninsured employees after the first 30 employees. The
Congressional Budget Office expected those penalties to bring in $4
billion in 2014.
"We commend the administration's wise move to delay the employer
reporting and penalty obligations under the Affordable Care Act," said
National Retail Federation President Neil Trautwein in a statement.
"This one-year delay will provide employers and businesses more time
to update their health care coverage without threat of arbitrary
punishment."
This does not affect businesses with fewer than 50 workers, who were
already exempt from that rule. Most large businesses already offer
coverage to their employees.
Senate Minority Leader Mitch McConnell, R-Ky., said the "White House
seems to slowly be admitting what Americans already know ... that
Obamacare needs to be repealed."
House Republicans, who have tried to repeal the Affordable Care Act 37
times, echoed McConnell.
"The best delay for ObamaCare is a permanent one," said House Majority
Leader Eric Cantor, R-Va.
Various parts of the law have taken effect since its passage in 2010,
including allowing children up to age 26 to remain on their parents'
insurance plans and discounts for prescription drugs for Medicare
patients. More young Americans have health insurance than before the
law, because of that change, and the discounts have saved Medicare
recipients billions of dollars.
However, the more complicated parts of the law, such as the exchanges
and the individual mandates, are set to take effect Jan. 1, and many
of the businesses and groups affected have worried about their ability
to meet the deadlines.
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