OBAMACARE PROVISION FOR BUSINESS DELAYED FOR A YEAR

As a major concession to the business community and response to those lawmakers that have been very adamant that Obamacare could damage our recovering economy, the Obama administration has postponed the federal health care law’s insurance mandate for employers next year.

The mandate would have required companies with at least fifty full-time employees to provide qualifying health benefits to workers or face financial penalties (“shared responsibility payments”). The provision of the law aims to shore up and strengthen the system that provides health benefits to most covered Americans. Instead, the delay will serve as a transition period for the provision of the law. “During this 2014 transition period, we strongly encourage employers to maintain or expand health coverage,” Mark Mazur, assistant secretary for tax policy at the Treasury Department, said in a statement.

The delay would not affect the main coverage of the law – the individual mandate and new subsidized insurance markets will be in place on a timely manner. The reason that the employer mandate is being delayed is that it could boost the cost of the law if more people end up seeking subsidies instead of getting covered on the job. The Treasury Department, which is in charge of the employer mandate, said it recognized that the steps businesses have to take to show they were complying with the rules were complex and a burden. Treasury said it would try to streamline them over the next year.

Because the delay is administratively imposed, there will be no penalties for businesses that don’t cover workers in 2014. As such, employers who don’t provide health insurance will be spared penalties of up to $3,000 per worker until 2015. The effect of the delay may not be extreme. Most large businesses do already cover their workers. Small businesses, with fewer than fifty workers, were already exempt from the rule. Nor will the change affect people who buy health insurance individually.

As that technicality is further worked out, the delay evidences that the health law is simply too complex, as is, to go live in 2014. And, as also criticized, the employer mandate adds to much cost to Obamacare. The law’s complexity and price tag, as such, is likely something that will be debated more over the course of the 2014 midterm elections.