The White House announced yesterday that it was delaying for a year the Obamacare requirement that large businesses must provide health insurance for employees or face fines. The White House said the delay will allay business fears about Obamacare, but Republicans saw it as a sign that the implementation is in trouble.
While media reports were quick to call it a setback for President Obama, the White House said the delay simply demonstrated that administration officials are willing to listen to feedback it was getting from the business world.
The announcement, posted without fanfare on the White House website, stated that the administration was delaying by one year the requirement that businesses with more than 50 workers provide health-care coverage or pay fines of $2,000 per employee.
“We have listened to your feedback. And we are taking action,” the website said.
According to the White House since an estimated 96 percent of businesses have fewer than 50 employees, most are exempt from the mandate. Nearly all firms of 200 or more workers offer their employees some sort of coverage, according to the Kaiser Family Foundation.
The decision won’t affect the centerpiece of the health-care law, which is the requirement, starting in 2014, that most Americans obtain insurance through their employer or through federally backed and state-backed marketplaces, known as exchanges.
“We believe we need to give employers more time to comply with the new rules,” Valerie Jarrett, a senior adviser to Obama, wrote in a blog post Tuesday evening. “This allows employers the time to . . . make any necessary adaptations to their health benefits while staying the course toward making health coverage more affordable and accessible for their workers.”
Republican House Speaker John A. Boehner of Ohio said the decision “means even the Obama administration knows the ‘train wreck’ will only get worse.”
“This is a clear acknowledgment that the law is unworkable,” Boehner said.
Bob Kocher, a former top health-care aide to Obama, said the delay was disappointing because it will create uncertainty about which parts of the law will take effect.
“It confuses people,” he said, adding that it “will undermine all the other rules because people will expect delay.”
But Erik Stewart, who advises small-business owners at the Washington Small Business Development Center in Aberdeen, Wash., told USA Today that the delay will let small-business owners overcome “incorrect information” about what the law actually requires.
He said many employers with fewer than 50 employees mistakenly think they have to buy insurance.
“What they hear on TV usually isn’t the whole story, and so what has happened is that there is a culture of fear concerning these laws,” Stewart said.