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| FILE - In this June 7, 2009, file photo, senior advisers Valerie Jarret and David Axelrod, right, walk across the South Lawn of the White House in Washington after returning from a trip with President Barack Obama. The Obama administration Tuesday, July 2, 2013, unexpectedly announced a one-year delay, until 2015, in a central requirement of the new health care law that medium and large companies provide coverage for their workers or face fines. Senior White House adviser Valerie Jarret cast the decision as part of an effort to simplify data reporting requirements. |
WASHINGTON
(AP) -- 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.
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.
The delay in the employer
requirement does not affect the law's requirement that individuals carry
health insurance starting next year or face fines. That so-called
individual mandate was challenged all the way to the Supreme Court,
which ruled last year that the individual requirement was
constitutional, since the penalty would be collected by the Internal
Revenue Service and amounted to a tax.
Tuesday's
action - announced while Obama was traveling back to Washington from
his trip to Africa - is sure to anger liberals and labor groups. But it
could provide cover for Democratic candidates in next year's
congressional elections.
The move undercuts
Republican efforts to make the overhaul and the costs associated with
new requirements a major issue in congressional races. Democrats are
defending 21 Senate seats to the Republicans' 14, and the GOP had
already started to excoriate Senate Democrats who had voted for the
health law in 2009.
Senior White House adviser Valerie Jarrett cast the decision as part of an effort to simplify data reporting requirements.
She
said since enforcing the coverage mandate is dependent on businesses
reporting about their workers' access to insurance, the administration
decided to postpone the reporting requirement, and with it, the mandate
to provide coverage.
"We have and will
continue to make changes as needed," Jarrett wrote in a White House blog
post. "In our ongoing discussions with businesses we have heard that
you need the time to get this right. We are listening."
Republicans called it a validation of their belief that the law is unworkable and should be repealed.
"Obamacare
costs too much and it isn't working the way the administration
promised," said Senate Republican leader Mitch McConnell of Kentucky.
"The White House seems to slowly be admitting what Americans already
know ... that Obamacare needs to be repealed and replaced with
common-sense reforms that actually lower costs for Americans."
