Obama again delays health care mandate for some employers

New rule will give midsize companies another year before facing tax penalty for not offering insurance to workers

The most recent postponement follows the Obama administration’s announcement in July that it would push back the deadline for the employer mandate.
Joe Raedle/Getty Images

The U.S. government on Monday delayed another part of the Affordable Care Act, President Barack Obama’s signature health care reform law, saying medium-size businesses that do not provide employees with health coverage would not face a tax penalty until 2016.

In July the administration delayed until 2015 the so-called employer mandate associated with the ACA, commonly known as “Obamacare.”

Possibly trying to fend off election-year damage on health care, the Obama administration, through the Treasury Department, offered several new changes, with the primary update affecting companies with 50 to 99 employees, which now have an additional year — until Jan. 1, 2016 — to comply with the coverage mandate.

For businesses with 100 or more employees, the requirement will still take effect in 2015. But other newly announced provisions, concerning technical issues like the calculation of working hours, may affect some of those firms.

For example, now businesses with 100 or more employees must offer coverage to at least 70 percent of full-time workers in 2015 — down from 95 percent. Those businesses will be required to offer coverage to at least 95 percent of full-time employees starting in 2016.

The rules clarified that government volunteers, such as firefighters and emergency responders, are not considered full-time employees — an uncertainty that worried state and local governments.

Teachers and other education employees will not be treated as part-timers even though their schools are closed or their work hours are limited in the summer, the rules state.

Additional safe harbors in the rules aim to make it easier for businesses to determine whether the coverage they offer is affordable for employees.

Some major business organizations were quick to praise the administration’s compromise.

“These final regulations secured the gold medal for greatest assistance to retailers and other businesses and our employees,” said Neil Trautwein, a vice president of the National Retail Federation.

The latest administration actions could help Democrats in November’s elections by defusing Republican charges that the ACA is a job killer.

But Republicans pounced again on an issue that they have consistently tried to turn into a referendum on the Obama presidency.

“Once again, the president is giving a break to corporations while individuals and families are still stuck under the mandates of his health care law," said Republican Speaker of the House John Boehner.

“And once again, the president is rewriting law on a whim. If the administration doesn’t believe employers can manage the burden of the law, how can struggling families be expected to?”

Under the ACA, most small businesses don’t have to offer coverage. There is no mandate for firms with fewer than 50 employees.

But for companies with 50 or more workers, the coverage requirement was originally to have taken effect this year. The administration’s announcement last summer of a one-year delay was the first sign of potential problems with the ACA’s rollout.

Since then, it has resembled a gigantic crisis-management exercise. The new federally run online sign-up system, HealthCare.gov, was crippled by technical problems for the better part of two months after its launch in the fall. Separately, millions of people who already had individual health insurance saw those policies canceled because their plans did not meet the law’s requirements.

The rules finalize draft proposals issued in December 2012 and took into consideration comments from businesses and members of Congress, the Treasury Department said.

Al Jazeera and wire services

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