The Obama administration unexpectedly announced Tuesday it is delaying the employer mandate under the Patient Protection and Affordable Care Act until 2015.
The mandate — which requires mid-sized and large employers to offer health insurance coverage to their workers — was one of the main requirements of the health care overhaul that was set to go into effect Jan. 1, 2014.
But the Treasury Department announced Tuesday that it would delay its enforcement an entire year after hearing numerous concerns from employers about the challenges of its implementation.
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“We have heard concerns about the complexity of the requirements and the need for more time to implement them effectively,” Mark J. Mazur, assistant secretary for tax policy, wrote in a blog post.
“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. We have listened to your feedback. And we are taking action.”
The one-year delay, he wrote, “will allow us to consider ways to simplify the new reporting requirements consistent with the law.”
Within the next week, Mazur said, the Treasury department will issue official guidance to insurers, self-insuring employers and other parties that provide health coverage. Formal rules will be proposed later this summer, he said.
PPACA requires employers with more than 50 full-time workers to provide health insurance or pay steep fines. Various studies and employer polls found that numerous companies would downsize their companies or cut hours for its employees to dodge the mandate.
The delay isn’t the first interruption for PPACA. Earlier this year, the administration delayed by one year its Small Business Health Options Program, a move that many small business owners called a “major letdown” for their employees looking for a competitive marketplace for health insurance options.
Republicans have been calling PPACA’s implementation a “train wreck,” arguing that the law will not be implemented on time.
A report out just last month from the Government Accountability Office also pointed to challenges in opening the federal exchanges on time, underscoring the challenges the administration has in the coming months.
The new employer mandate delay was enough ammo for critics of the law to continue their attacks. Senate Minority Leader Mitch McConnell said that the delay confirms that “Obamacare costs too much and it isn’t working the way the administration promised.”