(CNN) — The requirement that businesses provide their workers with health insurance or face fines — a key provision contained in President Barack Obama’s sweeping health care law — will be delayed by one year, the Treasury Department said Tuesday.
The delay came after business owners expressed concerns about the complexity of the reporting requirements, the agency said in its announcement. Under the Affordable Care Act, businesses employing 50 or more full-time workers that don’t provide them health insurance will be penalized.
“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,” Mark J. Mazur, assistant secretary for tax policy, wrote in a post on the Treasury Department’s website.
He said the extra year before the requirement goes into effect will allow the government to assess ways to simplify the reporting process for businesses. Penalties for businesses not providing health coverage to employees will now begin in 2015.
Supporters of the employer mandate note that most employers already provide health insurance to full time workers, and downplay the effect the requirement would have on small businesses, citing figures showing the vast majority of small businesses employ fewer than 50 workers.
But opponents claim the employer mandate is a potential job killer, saying businesses near the 50-worker cutoff will be unlikely to ramp up hiring if it means they’re required to provide employees health insurance.
“The administration has finally recognized the obvious – employers need more time and clarification of the rules of the road before implementing the employer mandate,” said Randy Johnson, a vice president at the U.S. Chamber of Commerce, a business group.
Obama’s administration has previously expressed openness to making the health care law easier to implement, and acted to shorten applications for health insurance on government-run exchanges from 21 pages to three.
On Tuesday, Obama’s senior adviser Valerie Jarrett – who acts as the White House’s liaison to big business – wrote the new delay was indicative of the administration’s determination to implement the health care law effectively and fairly, and that it wouldn’t affect other aspects of Obamacare.
“While major portions of the law have yet to be implemented, it’s already a little more affordable for businesses to offer quality health coverage to their employees,” Jarrett wrote, adding later: “As we implement this law, we have and will continue to make changes as needed. In our ongoing discussions with businesses we have heard that you need the time to get this right.”
Republicans have continued to attack the measure as confusing and bad for business, and voted again to repeal the law this spring. On Tuesday, GOP lawmakers said the delay of the employer mandate didn’t go far enough.
“Obamacare costs too much and it isn’t working the way the administration promised,” Sen. Mitch McConnell, the Senate Minority Leader, wrote in response to the decision, adding: “The fact remains that Obamacare needs to be repealed and replaced with common-sense reforms that actually lower costs for Americans.”
Rep. Eric Cantor, the House Majority Leader, was more succinct. “The best delay for ObamaCare is a permanent one,” he wrote on Twitter.
Some Democrats have also voiced concern about the roll-out of the health law — Sen. Max Baucus, a key Democrat who helped craft the legislation, expressed serious anxiety in April about its rollout.
“The administration’s public information campaign on the benefits of the Affordable Care Act deserves a failing grade. You need to fix this,” Baucus told Health and Human Services Secretary Kathleen Sebelius at a hearing.
“I just see a huge train wreck coming down,” he added later.
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