By Ben Goad and Elise Viebeck - 02/10/14 04:23 PM EST
The Obama administration on Monday announced a second delay of the employer mandate under ObamaCare, adding another black mark to the rollout and outraging Republicans who warned of a “lawless” White House.
The new delay, revealed in final regulations from the Treasury Department, gives businesses that have between 50 and 99 employees until January 2016 to either offer health insurance or pay penalties, provided they don’t cut workers just to get under the threshold.
Republicans denounced President Obama for circumventing Congress, while making the case that the law’s individual mandate to have insurance should be delayed as well.
“If the administration doesn’t believe employers can manage the burden of the [healthcare] law, how can struggling families be expected to?” Speaker John Boehner (R-Ohio) said in a statement.
“This continued manipulation by the president breeds confusion and erodes Americans’ confidence in him and his healthcare law. We need fairness for all, with relief from ObamaCare for every American.”
The mandate will still take effect in January 2015 for companies with 100 or more workers, who will have to provide their workers insurance or face penalties totaling $2,000 per employee, excepting the first 30.
The administration stressed that the vast majority of businesses — roughly 96 percent — have fewer than 50 employees and would not be subject to the mandate at all.
“Today’s final regulations phase in the standards to ensure that larger employers either offer quality, affordable coverage or make an employer responsibility payment starting in 2015 to help offset the cost to taxpayers of coverage or subsidies to their employees,” Assistant Secretary for Tax Policy Mark J. Mazur said in a written statement.
Officials said the delays were made in response to a flood of comments that were submitted after the draft mandate regulations were released in 2012.
By giving more time to the smallest businesses required subject to the mandate, administration officials said the phased implementation would allow flexibility for firms striving to comply with the law.
But congressional Republicans and some industry groups said the shift is more evidence that the mandate is unworkable and should be scrapped altogether.
“This latest unilateral delay is further evidence that the healthcare law is hurting the economy,” said Sen. John Barrasso (R-Wyo.).
House Republican Leader Eric Cantor (R-Va.) charged the White House with seeking to delay certain healthcare requirements until after Election Day.
“It’s time to stop creating more chaos, and to delay ObamaCare for all Americans,” Cantor said.
The new schedule for the employer mandate is the latest in a series of unilateral moves by the administration to change the healthcare law in response to the concerns of business interests, lawmakers and advocacy groups.
Officials have argued the delays, which ranged from shifting consumer deadlines to allowing continued access to certain health plans, were needed to ease pressure on the public.
A senior Treasury Department official stressed that the new language was not meant to influence companies’ decisions about hiring or downsizing.
“We’re not trying to interfere with what the business necessities might be,” the official said.
The new rules clarify the definition of a 30-hour workweek, the basis for how the law counts full-time employees. Employers will be allowed to use average employee hours over the course of an entire year to calculate their full-time staff.
Additional final regulations governing reporting requirements from companies will be issued in the coming weeks, officials said.
The reaction from business groups was mixed.
While praising the delay as a helpful in the short term, many groups decried the healthcare law as a burden on private industry.
The International Franchise Association (IFA), which represents the owners of popular chains such as McDonald’s and Dunkin’ Donuts, accused the administration of “picking winners and losers.”
“This announcement is just another delay that while positive in the short term for some franchises, only postpones the inevitable and demonstrates the Affordable Care Act remains a significant problem for employers to implement,” said IFA President and CEO Steve Caldeira.
But a major trade group for retailers hailed the announcement.
“The Administration should receive a gold medal for recognizing the enormous complexities of the Affordable Care Act, and its agility and flexibility in working with retailers and others in crafting these much-needed and commonsense reforms and revisions,” said Neil Trautwein of the National Retail Federation.
The National Republican Senatorial Committee said the change to the mandate would merely boost GOP candidates as they seek to win the upper chamber in the November elections.
“Democrats seem to believe that because they control Washington, they have imperial powers, but their lawlessness creates even more energy and enthusiasm to elect a Republican Senate majority in 2014,” said Executive Director Rob Collins in a statement.
“ObamaCare is extremely unpopular and will hurt Democrats on the ballot in 2014.”
— This story was updated on Feb. 11.