Key ACA Provision Delayed One Year

The Obama administration has bowed to the concerns of businesses and announced that it is delaying part of the Affordable Care Act (ACA) for one year.

The administration announced on Tuesday that it will be delaying the employer mandate, which requires larger employers provide coverage for their workers or pay penalties, until 2015.

The delay, although a coup for businesses unhappy with ACA requirements, is a major blow to President Obama and Democrats. The Washington Post outlined seven main reasons why delaying the employer mandate is such a huge deal, including that it hurts the president’s credibility and it provides opportunity to see if the rest of the law should be delayed.

“This is simply the latest evidence that implementation of this terrible law is going to be difficult if not impossible, and the burden is going to fall on the people who create American jobs,” Amanda Austin, director of federal public policy for the National Federation of Independent Business, said in a statement. “Temporary relief is small consolation. We need a permanent fix to this provision to provide long term relief for small employers.”

Mark J. Mazur, assistant secretary for tax policy at the U.S. Department of Treasury, wrote a blog post Tuesday night when the news broke, explaining how the decision was made.

“Over the past several months, the Administration has been engaging in a dialogue with businesses - many of which already provide health coverage for their workers - about the new employer and insurer reporting requirements under the Affordable Care Act (ACA),” Mazur wrote. “We have heard concerns about the complexity of the requirements and the need for more time to implement them effectively.”

The ACA requires certain employers report information on the health coverage offered to full-time employees and the administration is going to try to minimize reporting. Mazur added that the one-year delay gives the administration time to meet two goals: simplifying the new reporting requirements, and adapting coverage and reporting systems.

The New York Times and other publications all pointed out that the decision to postpone the provision, which is unpopular among business groups, means the mandate won’t become effective until next year’s midterm elections.

However, the delay of the employer mandate will not affect other provisions in the health care law. Valerie B. Jarrett, a senior advisor to Obama, wrote in a blog post on the White House website:

“We are on target to open the Health Insurance Marketplace on October 1 where small businesses and ordinary Americans will be able to go to one place to learn about their coverage options and make side-by-side comparisons of each plan’s price and benefits before they make their decision.”

This remains to be seen since a recent report from the Government Accountability Office shows that the Centers for Medicare and Medicaid Services’ is behind schedule for some of the 34 state exchanges that it will be operating.