WASHINGTON -- In a major concession to business groups, the Obama administration unexpectedly announced a one-year delay, until 2015, Tuesday in a central requirement of the new health care law that medium and large companies provide coverage for their workers or face fines.
The move sacrificed timely implementation of President Barack Obama's signature legislation but may help the administration politically by blunting a line of attack Republicans were planning to use in next year's congressional elections. The employer requirements are among the most complex parts of the health care law, which is designed to expand coverage for uninsured Americans.
"We have heard concerns about the complexity of the requirements and the need for more time to implement them effectively," Treasury Assistant Secretary Mark Mazur said in a blog post. "We have listened to your feedback and we are taking action."
Business groups were jubilant. "A pleasant surprise," said Randy Johnson, senior vice president of the U.S. Chamber of Commerce. There was no inkling in advance of the administration's action, he said.
Under the law, companies with 50 or more workers must provide affordable coverage to their full-time employees or risk a series of escalating tax penalties if just one worker ends up getting government-subsidized insurance.
Originally, that requirement was supposed to take effect next Jan. 1. Business groups complained after the law was passed that the provision was too complicated. For instance, the law created a new definition of full-time workers, those putting in 30 hours or more. But such complaints until now had seemed to be going unheeded.
The delay in the employer requirement does not affect the law's requirement that individuals carry health insurance starting next year or face fines. That so-called individual mandate was challenged all the way to the Supreme Court, which ruled last year the requirement was constitutional since the penalty would be collected by the Internal Revenue Service and amounted to a tax.
Tuesday's action is sure to anger liberals and labor groups, but it could provide cover for Democratic candidates in next year's congressional elections.
The move undercuts Republican efforts to make the overhaul and the costs associated with new requirements a major issue in congressional races. Democrats are defending 21 Senate seats to the Republicans' 14, and the GOP had already started to excoriate Senate Democrats who had voted for the health law in 2009.
Senior White House adviser Valerie Jarrett cast the decision as part of an effort to simplify data reporting requirements.