Facing an outcry from businesses, the Obama administration is delaying a key part of the new health care law for an additional year, to 2015 — a stunning move that officials said gives them a chance to work out kinks over how to administer the so-called employer mandate.
In statements Tuesday evening, White House adviser Valerie Jarrett and Mark J. Mazur, assistant secretary for tax policy at the Treasury, said the goal was to give businesses more time to comply with the rules, though opponents said it was an acknowledgment of a looming disaster.
The delay is to the mandate requiring businesses with more than 50 workers to offer insurance to all full-time employees, or else pay a fine of $2,000 per worker. Business lobbied heavily against it, and now it will not go into effect until after the 2014 midterm elections.
“We have listened to your feedback. And we are taking action,” Mr. Mazur said.
The individual mandate, which applies to those who are self-employed or whose companies don’t offer insurance, is still in effect as of 2014, as are the state-by-state insurance markets, or “exchanges,” which are to be operating as of Oct. 1 and will allow small businesses and individuals without employer-based insurance to shop for health coverage with the help of government subsidies.
The health law was President Obama’s signature domestic achievement, powered through Congress on the strength of Democratic votes. Its core provisions have been upheld by the Supreme Court, but that has done little to erase the political battle over the law, which remains unpopular with voters.
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Tuesday’s delay comes as critics in both parties have warned of a looming “train wreck” in implementing the law, and as government auditors have found the administration lagging in meeting deadlines and goals.
Republicans said the move adds fuel to their calls for the entire law to be repealed.
“This announcement means even the Obama administration knows the ‘train wreck’ will only get worse,” said House Speaker John A. Boehner. “I hope the administration recognizes the need to release American families from the mandates of this law as well.”
Sen. John Barrasso, Wyoming Republican and a doctor, said the move was “a cynical political ploy to delay the coming train wreck associated with ‘Obamacare’ until after the 2014 elections.”
Already the administration was facing reports from across the nation that businesses, and even local government agencies and schools, were cutting employees or limiting hours to avoid the mandate’s thresholds.
Ms. Jarrett said the delay will give the administration more time to look into all of the information businesses will be asked to provide to prove they are in compliance. She said businesses have complained the reporting is a huge burden, and she said they will see if the process can be streamlined.
SEE ALSO: Religious coalition rejects Obama contraceptive compromise
Late last week, the administration announced a delay in another part of the health care equation when it said religiously affiliated nonprofits have until the beginning of next year to comply with the mandate to provide coverage of contraceptives. The deadline had been Aug. 1.
The contraceptive mandate has proved to be among the more controversial parts of the law, and Tuesday a coalition of Christian groups demanded that the Obama administration exempt businesses with moral objections from having to comply with it.
“We’re not going to back down on this question,” said Russell D. Moore, president of the Southern Baptist Convention.
In a letter signed by dozens of religious representatives, including from the Catholic, Protestant and Mormon churches, the leaders said the matter goes beyond contraceptives and touches on fundamental conscience rights.
Dozens of businesses have sued to try to halt the Obama contraceptive policy. On Friday, the 10th U.S. Circuit Court of Appeals issued a temporary restraining order exempting Hobby Lobby Stores, a crafts company based in Oklahoma, from the mandate while its case winds its way through the courts.
But the lawsuits could take some time to reach final decisions. Mr. Moore said that means the battle over the mandate may shift to Congress.
The Obama administration has drawn up a three-tier policy that would exempt churches and other actual houses of worship from the requirement altogether; grant faith-based nonprofits an accommodation to divorce themselves from the mandate by not having to manage or pay for the contraceptives; and give for-profit entities no relief. All other businesses would have to provide regular coverage.
Challengers particularly object to having to cover contraceptives taken after sex, such as Plan B or Ella, which they say can sometimes act as an abortifacient by preventing implantation of a fertilized egg.