Administration gives employers until 2015 on health insurance mandate

Patient Joan West (R) receives a check up from Dr. Lisa Vinci at University of Chicago Medicine Primary Care Clinic in Chicago June 28, 2012. (Photo by Jim Young/Reuters)
Patient Joan West (R) receives a check up from Dr. Lisa Vinci at University of Chicago Medicine Primary Care Clinic in Chicago June 28, 2012.

The Obama administration unexpectedly announced that it has decided to give employers an extra year to comply with a key provision of the health care reform law. In a statement released Tuesday, a Treasury Department official said the administration would give employers until 2015 to start reporting on the insurance coverage they offer to workers.

The Affordable Care Act, President Obama's signature legislative achievement, requires businesses with more than 50 employees to offer health care coverage that meets basic standards of coverage and affordability. Employers were supposed to start filing annual reports on their compliance next year, and those failing to meet the new standards were facing fines.

Business groups have complained that the reporting mandate is too complicated to enact so quickly, so the administration is extending the deadline—effectively lifting the insurance mandate as well.

“We have heard concerns about the complexity of the requirements and the need for more time to implement them effectively,” Assistant Treasury Secretary Mark Mazur said in the announcement. “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.”

Mazur urged businesses to file voluntary reports in 2014 as a “real world test of [the] reporting system,” but he said they wouldn’t be fined for noncompliance next year. The new policy will be published as a regulation later this week.

Because most large employers already sponsor health insurance plans, the effect on consumers won’t be dramatic. And workers living below 400% of the federal poverty level will still be eligible for subsidies next year.

Republicans reacted predictably. Senator McConnell released a statement:

"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."

And GOP Majority Leader Eric Cantor tweeted:

The best delay for ObamaCare is a permanent one.— Eric Cantor (@GOPLeader) July 2, 2013

James Klein, president of the American Benefits Council, said the group applauded the decision to delay. "This provides vital breathing room to implement the law in a more thoughtful and administrable way," he said.

Josh Barro wrote on Business Insider that if the reason for the delay is that the Obama administration couldn't "get its act together on the reporting requirements," that would be an embarrassment--but that "the reporting issue may just be a pretext for the delay." Calling the employer mandate "a bad policy that will discourage job creation," Barro speculated that the administration "may be looking for a way to avoid imposing it ever."

At any rate, the new extension will delay the imposition of any penalties until after the 2014 midterm elections.