Employers with 50 to 99 workers will have yet another year, until 2016, to comply with the Affordable Care Act’s requirement to provide health coverage for full-time employees, the Obama administration announced Monday.
Final regulations issued Monday by the Treasury Department and the Internal Revenue Service allow these mid-size employers, who make up about 2 percent of the nation’s job providers, to simply report on the status of their workers’ health insurance coverage in 2015.
But penalties for noncompliance with the employer responsibility provision of the law – also known as the “employer mandate” – would not be assessed until 2016.
The health law originally called for firms with more than 50 full-time employees to provide affordable health insurance or face a penalty of $2,000 per employee in 2014. But after months of conferring with fretful employers, the administration last summer delayed enforcement of the employer mandate until 2015.
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Today’s announcement now delays the original implementation timetable for a key component of the law by two years. It’s the latest in a series of revised, delayed or discarded provisions that have characterized the tortured rollout of the contentious health law.
Large employers with 100 or more workers still must abide by the July 2013 extension and begin offering affordable coverage to their full-time workers beginning in 2015. But under the new rules, they can now phase in that coverage for these employees, covering only 70 percent in 2015 and 95 percent in 2016 and beyond.
“Today’s final regulations phase in the standards to ensure that larger employers either offer quality, affordable coverage or make an employer responsibility payment starting in 2015 to help offset the cost to taxpayers of coverage or subsidies to their employees,” said Mark J. Mazur, assistant treasury secretary for tax policy.
But Republican critics, who have called for a delay in the law’s “individual mandate” that requires most Americans to have health coverage in 2014 or face a fine, immediately pounced on the new employer grace periods as corporate favoritism.
“Once again, the president is giving a break to corporations while individuals and families are still stuck under the mandate of his health care law,” said House Speaker John Boehner of Ohio. “And, once again, the president is rewriting law on a whim.”
House Majority Leader Eric Cantor, R-Va., said the move smacked of election-year politics and shows why congressional Republicans have expressed distrust in the president’s ability to enforce a possible immigration reform deal.
“The administration has stressed this week that Congress can trust the president to enforce the law, and then once again, he selectively delays parts of Obamacare in order to put off more negative consequences until after Election Day,” Cantor said. “This continued manipulation by the president breeds confusion and erodes Americans’ confidence in him and his health care law.”
Business groups were divided about the new changes. The American Hotel & Lodging Association praised the “greater flexibility” that the new regulations allow.
“This demonstrates the administration’s growing understanding of the lingering uncertainty and concern among hotels and other businesses about implementation of the health care law – many areas of which are still being finalized,” said Katherine Lugar, the group’s president and CEO.
U.S. Chamber of Commerce president Thomas J. Donohue said he appreciated the extra time the move allows employers but that it also creates problems by “moving the goalposts” for other companies.
Amanda Austin, director of federal public policy at National Federation for Independent Business, said the law has “systemic flaws that need to be corrected permanently.”
“Every time small-business owners hear about another delay or random rewrite of the rules under this law, they are shaking their heads and thinking, ‘We told you so,’” Austin said. “Today’s news is simply the latest indicator that this law is not ready for prime time.”
Anita Kumar and Lesley Clark of the Washington Bureau contributed to this story.