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Obama administration delays major requirement of health law

In a major concession to business groups, the Obama administration yesterday unexpectedly announced a one-year delay, until 2015, 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 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 Jan. 1. Business groups complained since the law 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 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 that requirement was constitutional since the penalty would be collected by the Internal Revenue Service and amounted to a tax.

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