The mandate requiring employers to provide their workers with health insurance will be delayed by a year, the administration announced Tuesday. Delaying the requirement until 2015 is an enormous victory for businesses that had lobbied against the health care law, The Hill reported.
The change will likely mean that more people will buy individual coverage through the law's new insurance exchanges, which are supposed to be open for enrollment by Oct. 1. In Iowa, six companies have applied to sell coverage under the exchanges.
If fewer employees have access to coverage through work, at least some are likely to turn to the exchanges for coverage and the tax credit that helps cover the cost.
The Treasury Department's announcement does not affect the individual mandate, which requires most taxpayers to either purchase insurance or pay a penalty, and administration officials said on Tuesday that other aspects of the law wouldn't be delayed.
In a White House blog post, senior adviser Valerie Jarrett wrote that the administration believed it needed to give employers "more time to comply with the new rules."
"This allows employers the time to test the new reporting systems and make any necessary adaptations to their health benefits while staying the course toward making health coverage more affordable and accessible for their workers," Jarrett wrote Tuesday evening. Jarrett also wrote that the delay would help in "cutting red tape and simplifying the reporting process."
"We have heard the concern that the reporting called for under the law about each worker's access to and enrollment in health insurance requires new data collection systems and coordination," Jarrett said. "So we plan to revamp and simplify the reporting process."
The U.S. Chamber of Commerce praised the delay.
"The administration has finally recognized the obvious: Employers need more time and clarification of the rules of the road before implementing the employer mandate," said Randy Johnson, the chamber's senior vice president for labor, immigration and employee benefits.
"The chamber has testified numerous times about the problems with the mandate, and we applaud the administration's step to delay this provision. We will continue to work to alleviate this and other problems with Obamacare," he said.