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The White House is delaying the employer health mandate of the Affordable Care Act by one year, bowing to corporate pressure and sparking another round of calls from Republicans to repeal the law.
Valerie Jarrett, senior adviser to President Barack Obama, wrote a blog post late Tuesday titled “We’re Listening to Businesses about the Health Care Law” to explain the decision.
“In our ongoing discussions with businesses we have heard that you need the time to get this right. We are listening,” Jarrett wrote.
Jarrett said the administration will revamp and simplify the reporting process for employers, and in the meantime, delay the mandate by a year.
But the decision is embarrassing for the administration, given that the law passed more than three years ago.
And it quickly became fodder for the GOP, given that Republicans — and some Democrats such as Senate Finance Chairman Max Baucus, D-Mont. — warned of the possibility of a “train wreck” in implementing the law.
“Absolutely thrilled by #ObamaCare delay,” tweeted Brad Dayspring, strategist for the National Republican Senatorial Committee. “Will help #GOP candidates across the board in 2014. Debate will be a repeat of 2010.”
Business groups such as the National Retail Federation quickly praised the White House’s punt, while Republican lawmakers said it was simply more evidence that the law should be repealed.
“That the Obama Administration is putting off this job-killing requirement on employers, but not individuals and families, shows how deeply flawed the President’s signature domestic policy achievement is,” Sen. Orrin G. Hatch of Utah said in a statement. Hatch, the ranking Republican on the Finance Committee, noted that the delay will kick the mandate past the midterm elections and said he hoped it wasn’t a back-door way to get more Americans into the new insurance exchanges.
“The only reasonable recourse is to fully repeal this law,” he said.
House Majority Leader Eric Cantor, agreed. “The best delay for ObamaCare is a permanent one,” the Virginia Republican said in a statement.
Speaker John Boehner, R-Ohio, said the announcement shows “even the Obama administration knows the ‘train wreck’ will only get worse.”
It’s not immediately clear just how much the decision will cost the government, but the Congressional Budget Office projected in May that the mandate would generate $10 billion in revenue in fiscal 2015, and $140 billion over the coming decade.
The Treasury Department announced the decision earlier Tuesday in a blog post.
“We have heard concerns about the complexity of the requirements and the need for more time to implement them effectively,” wrote Mark J. Mazur, the assistant secretary of tax policy. “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. We have listened to your feedback. And we are taking action.”
Mazur said delaying the mandate a year would give the government more time to adapt health coverage and reporting systems.
“We strongly encourage employers to maintain or expand health coverage,” Mazur said. He also noted that employees would still be eligible for tax credits for insurance exchanges if their employers do not offer insurance.
Meredith Shiner contributed to this report.