Health-Law Employer Mandate Delayed by U.S. Until 2015

Obama administration decided to delay a key requirement under its signature 2010 health-care law.

Businesses won’t be penalized next year if they fail to provide workers health insurance after the Obama administration decided to delay a key requirement under its signature 2010 health-care law.

The government will postpone enforcement of the so-called employer mandate until 2015, the administration said today. 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.

The move addresses complaints from employer groups to President Barack Obama’s administration about the burden of the law’s reporting requirements. The decision pushes the issue past the 2014 midterm congressional elections, as Republicans have sought to make the health law a symbol of government overreach.

“In our ongoing discussions with businesses we have heard that you need the time to get this right,” Valerie Jarrett, a senior adviser to Obama, said in a White House blog post announcing the decision. “We are listening.”

The move may lead some employers to delay providing coverage to workers. The law’s individual mandate remains in effect, a provision that requires most Americans to carry health insurance.

Two Obama administration officials, who discussed the move before the announcement on condition that they not be identified, said the administration decided to wait until 2015 before enforcing the employer mandate in order to simplify reporting requirements and give businesses more time to adjust their health-care coverage.

Recognized ‘Obvious’

Randy Johnson, senior vice president of labor, immigration, and employee benefits at the U.S. Chamber of Commerce, the nation’s largest business lobby, praised the move.

“The administration has finally recognized the obvious — employers need more time and clarification of the rules of the road before implementing the employer mandate,” Johnson said in an e-mail.

Senate Minority Leader Mitch McConnell, a Kentucky Republican, said in an e-mailed statement that the delay confirms his party’s argument that “Obamacare costs too much and it isn’t working the way the administration promised.”

The 2010 Patient Protection and Affordable Care Act allows the Obama administration to set the starting date for the employer coverage reporting requirement that’s the linchpin of the mandate. The administration had not yet announced a date, one of the officials said. Still, enforcement of the mandate had been widely expected to begin in 2014, the official said.

Business Groups

The White House had been in discussions with business groups over complaints about the reporting requirements, and senior officials believe they can simplify the process, the officials said. The administration plans to invite employer groups to discuss ways of simplifying administrative burdens created by the mandate, the officials said.

Most large employers already provide coverage that meets the law’s requirements, the officials said.

The officials said the decision stemmed from a commitment in the administration to reduce regulatory red tape as much as possible and drew parallels to a move earlier this year to cut the length of application forms for insurance provided through government-sponsored exchanges to three pages from 21.

Neil Trautwein, vice president and employee benefits counsel for the National Retail Federation, called the move “an unexpected but extraordinarily wise decision.”

The decision could lead companies to delay their own decisions on whether to offer coverage to all their workers, Trautwein said.

“The administration is certainly encouraging employers to continue and expand offerings,” he said. “We’ll see how that goes.”

To contact the reporters on this story: Mike Dorning in Washington at mdorning@bloomberg.net; Alex Wayne in Washington at awayne3@bloomberg.net

To contact the editor responsible for this story: Steven Komarow at skomarow1@bloomberg.net

SOURCE: http://bloom.bg/14O1Y74