WASHINGTON (AP) — Angling to avoid political peril, the Obama administration Monday granted employers another delay in a heavily criticized requirement that medium-to-larger firms cover their workers or face fines.
In one of several concessions in a complex Treasury Department regulation of more than 200 pages, the administration said companies with 50 to 99 employees will have an additional year to comply with the coverage requirement, until January 1, 2016.
For businesses with 100 or more employees the requirement will still take effect in 2015. But other newly announced provisions, affecting technical issues such as the calculation of working hours, may help some of those firms.
More than 90 percent of companies with 50 or more employees already cover their workers without the government telling them to do so, but the debate has revolved around the potential impact on new and growing firms. Most small businesses have fewer than 50 workers and are exempt from the mandate. However, employer groups were also uneasy with a requirement that defines a full-time worker as someone averaging 30 hours a week.
Republicans trying to take control of the Senate in the November elections have once again made President Barack Obama's health care law their top issue, casting it as job killer. They want to use the employer mandate to build that case, with anecdotes of bosses reluctant to hire a 50th worker, or slashing the hours of low-wage workers who need to pay household bills. Monday's moves by the administration seemed calibrated to reduce that risk.
The reaction of business groups was mixed.
"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 U.S. Chamber of Commerce was unimpressed, calling it more of a respite than a fundamental change.
"This short-term fix also creates new problems for companies by moving the goalposts of the mandate modestly when what we really need is a time-out," president Thomas Donohue said in a statement.
The administration still hasn't issued rules for reporting requirements on business and insurers, the nitty-gritty of how the coverage requirement will be enforced.
Administration officials and the law's supporters said the concessions were the sorts of reasonable accommodations that regulators make all the time when implementing major new legislation. The Treasury department said Secretary Jack Lew was well within his legal authority in making the changes.
"This common sense approach will protect employers already providing quality insurance, while helping to ensure that larger employers are prepared to meet their responsibility to their hard-working employees," said House Minority Leader Nancy Pelosi, D-Calif.