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The Obama administration's decision to delay implementation of a key part of the Affordable Care Act is winning praise from business groups today. The administration has announced it will wait another year before penalizing large employers who fail to offer health care coverage to their workers. The delay gives retail and restaurant companies that had opposed the mandate more time to prepare for the law.
NPR's Jim Zarroli reports.
JIM ZARROLI, BYLINE: Under the Affordable Care Act, any employer with 50 or more full-time workers is required to offer health care benefits. And those that don't do that have to pay an annual penalty of at least $2,000 per employee. Yesterday, the administration surprised a lot of people by announcing that the penalties won't kick in until January 2015, a year later than previously announced. The decision essentially gives companies another year to comply with the requirement.
Administration officials said they had heard concerns about the complexity of the requirements and wanted to give employers more time to implement the new rules.
Neil Trautwein is vice president of the National Retail Federation.
NEIL TRAUTWEIN: I think they figured out that they were not going to get to where they needed to get to in time to begin enrollment in October and open the doors in January. So I think it's a pragmatic call.
ZARROLI: The decision comes following intense pressure from some business groups opposed to the employer mandate. While most large employers already offer health benefits, many retailers and restaurant owners do not.
Scott Womack is a franchisee for International House of Pancakes in the Midwest. He says the administration hasn't yet defined some of the terms in the Affordable Care Act, which has made it hard for employers like him to determine what their responsibilities will be. So, Womack welcomes the extra time he's been given.
SCOTT WOMACK: I think it's a good thing. It's the right thing to do considering how many questions remain.
ZARROLI: But Womack says in the long run he still expects the bill to hurt his bottom-line.
WOMACK: The financial burden for the restaurant industry really hasn't changed. It's been delayed a year.
ZARROLI: In fact, there have been anecdotal reports in the media that some employers are shaving their worker's hours in an effort to keep them part-time, so they won't have to cover them.
The administration's decision yesterday adds a new wrinkle to the ongoing efforts to prepare for the health care act. Administration officials say the requirement to provide coverage is technically still in effect next year. But without the penalties, some employers who don't offer coverage now are likely to delay doing so.
Carrie Gleason is with the Retail Action Project, which has been trying to prepare retail workers for the bill's implementation. She says the delay means workers won't have a clear sense what their options will be.
CARRIE GLEASON: So for the uninsured Americans who are already facing the burden of not having health insurance, this decision by the Obama administration does complicate their efforts.
ZARROLI: Even as they praise the administration's decision to delay the penalties, business groups indicated they would continue trying to chip away at the act. For the retail industry, one big goal is to change the bill's definition of full-time employees as those working more than 30 hours a week. That would reduce the number of people who qualify for mandatory health benefits and lower the cost for employers.
Jim Zarroli, NPR News, New York. Transcript provided by NPR, Copyright NPR.