WASHINGTON (AP) -- In a major concession to business groups, the Obama administration Tuesday unexpectedly announced a one-year delay in a central requirement of the a landmark health care law that medium and large companies provide coverage for their workers or face fines.
Under the 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. Business groups have complained since the law passed that the provision was too complicated.
"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."
The unexpected decision is sure to anger liberals and labor groups, but it could provide cover for Democratic candidates in next year's congressional elections.
While the White House sacrificed timely implementation of a key element of President Barack Obama's health care law, the move also 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 Republicans had already started to excoriate Senate Democrats who had voted for the health law in 2009.
Senior White House adviser Valerie Jarret 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."
U.S. Senate Republican Leader Mitch McConnell made the following statement following the Obama administration’s decision to delay the employer mandate provision of Obamacare while leaving the burdensome mandates and regulations in place for everyone else:
"Obamacare costs too much and it isn’t working the way the administration promised. And while the White House seems to slowly be admitting what Americans already know, and what I hear consistently in my travels around Kentucky regarding the regulatory burden on employers, the fact remains that Obamacare needs to be repealed and replaced with common-sense reforms that actually lower costs for Americans."