By Karen Pallarito
WEDNESDAY, July 3 (HealthDay News) -- In a surprise announcement, the Obama administration said Tuesday evening that it was delaying implementation of a key part of its landmark health-reform law -- the requirement that employers with more than 50 workers offer insurance coverage by Jan. 1, 2014 or face fines.
The new deadline for providing such coverage is now Jan. 1, 2015, administration officials announced on blog postings.
Administration officials said the delay was prompted by concerns from business leaders that the reporting system needed to carry out the coverage mandate was complex and made it difficult to meet the Jan. 1, 2014 deadline.
"We have heard concerns about the complexity of the requirements and the need for more time to implement them effectively. We recognize that the vast majority of businesses that will need to do this reporting already provide health insurance to their workers, and we want to make sure it is easy for others to do so," Mark Mazur, assistant secretary for tax policy at the Treasury Department, wrote in a blog posting.
Business groups had complained that the employee coverage provision was too complicated and welcomed the delay in its implementation.
There was no advance indication of the Obama administration's decision, which came as a "pleasant surprise," Randy Johnson, senior vice president of the U.S. Chamber of Commerce, told the Associated Press.
Neil Trautwein, a vice president of the National Retail Federation, said, "We commend the administration's wise move. It will provide employers and businesses more time to update their health care coverage without threat of arbitrary punishment."
Helen Darling, president and CEO of the National Business Group on Health, called the delay "terrific news for large employers." It buys time to make needed changes to health-benefits programs and provides relief from reporting requirements and compliance with complex rules, she said in a statement.
Under the employer provision, companies with 50 or more workers must provide affordable coverage to all full-time employees or face the risk of escalating tax penalties. The requirement was expected to have the largest impact on major chain hotels, restaurants and retail stores, the AP said.