In a surprise announcement late today, the Obama administration delayed a central requirement of Obamacare—the mandate for companies with more than 50 employees to provide health insurance or face fines.
Companies now have until 2015 to provide coverage. The requirement was supposed to take effect Jan. 1, 2014. It was not immediately clear how or whether the delay will affect the mandate that health insurance plans include coverage for contraceptive and abortifacient drugs. The delay will not affect the mandate for individuals to have health insurance or face fines.
In a blog post announcing the delay, an administration official claimed the government wanted to give businesses more time to work through “complex requirements.”
“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 wrote. “We have listened to your feedback and we are taking action.”
Senior White House adviser Valerie Jarret cast the decision as part of an effort to simplify data reporting requirements. 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, she said.
“We have and will continue to make changes as needed,” Jarrett wrote in another blog post. “In our ongoing discussions with businesses we have heard that you need the time to get this right. We are listening.”
Although the delay is couched as an olive branch for businesses, it could also be a political move. Democrats facing reelection in 2014 were sure to face stiff criticism over the law, especially as its popularity wanes.
Republicans described the delay as proof that the law won’t work and should be repealed.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 “The White House seems to slowly be admitting what Americans already know … that Obamacare needs to be repealed and replaced with common-sense reforms that actually lower costs for Americans.”