Businesses won’t be penalized next year if they fail to provide their workers with health insurance, the Obama administration announced late Tuesday.
White House officials decided to delay a key requirement under the Affordable Care Act, and will postpone enforcement of the employer mandate until 2015. Under the provision, companies with 50 or more workers face a fine of as much as $3,000 per employee if they don’t offer affordable insurance.
“As we make these changes, we believe we need to give employers more time to comply with the new rules,” senior Obama advisor Valeria Jarrett wrote on the White House blog. “Since employer responsibility payments can only be assessed based on this new reporting, payments won’t be collected for 2014. This allows employers the time to test the new reporting systems and make any necessary adaptations to their health benefits while staying the course toward making health coverage more affordable and accessible for their workers.”
The delay comes after harsh criticism by business owners and chambers of commerce nationwide, and adds to speculation that the ACA will not be implemented. Jarrett’s sentiments were echoed by Mark Mazur, assistant secretary for tax policy at the U.S. Department of the Treasury.
“First, it will allow us to consider ways to simplify the new reporting requirements consistent with the law,” he said. “Second, it will provide time to adapt health coverage and reporting systems while employers are moving toward making health coverage affordable and accessible for their employees.”
Mazur went on to say that within the next week, the Obama administration will publish formal guidance describing this transition for employers. Officials also plan to “revamp and simplify the reporting process,” he said.
As word spread, Texas Senator Ted Cruz addressed the delay on Twitter, saying: “Heard Obama Admin may delay #Obamacare employer mandate for 1 year. How about we delay it all forever? #FullRepeal.” His tweet was accompanied by a photo that included an arrow pointed to his avatar and read, in all caps, “This person wants to repeal Obamacare.”
Dallas state representative Dan Branch speculated—via a Weekly Standard report— that the delay is strategically placed after the 2014 elections.
