WASHINGTON (Reuters) - The U.S. administration on Tuesday said it will not require employers to provide health insurance for their workers until 2015, a move that delays a key provision of President Barack Obama’s healthcare reform law by a year.
The delay, which could raise new questions about whether Obamacare will be implemented on time, comes in response to widespread complaints from businesses and their lobbyists about reporting requirements for employers with 50 or more full-time workers.
Companies would have had to pay the Internal Revenue Service $2,000 for each full-time employee who did not get health coverage, beginning January 1, when the Patient Protection and Affordable Care Act was scheduled to come into full effect.
“This is designed to meet two goals,” Mark Mazur, the 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 law. Second, it will provide time to adapt health coverage and reporting systems while employers are moving toward making health coverage affordable and accessible.”
He said the administration will publish formal guidance describing the changes within the next week.
Republican lawmakers seized on the announcement as evidence the healthcare reform they have repeatedly sought to repeal represents a flawed administration policy.
“A delay - conveniently past the 2014 election - only adds to the uncertainty these job creators face because of Obamacare,” said Senator Orrin Hatch, top Republican on the Senate Finance Committee. “The only reasonable recourse is to fully repeal this law.”
The administration has already delayed insurance offerings for small businesses that were to be made available through new online exchanges. A recent report by the watchdog Government Accountability Office also called into question whether new insurance marketplaces for millions of individuals would meet an October 1 deadline for open enrollment.
Valerie Jarrett, a senior advisor to Obama, said in a blog post on Monday that the government was fully prepared to open the new insurance exchanges for individuals in October. While the nation’s largest employers already offer extensive health benefits to their full-time employees, many small and mid-sized companies will now be required to provide insurance for the first time.
The National Retail Federation, a powerful lobby group, had urged the administration to consider a delay, and said the decision on Tuesday “will provide employers and businesses more time to update their healthcare coverage without threat of arbitrary punishment.”
Reporting by David Morgan; editing by Michele Gershberg and Prudence Crowther