The Obama administration on Monday issued new rules giving mid-sized employers extra time to cover their employees as mandated by the Affordable Care Act, marking the second time in a year the White House has granted businesses a grace period.
Under the new rules, announced by Treasury Department officials, employers with 50 to 99 workers have until 2016 before they risk being hit with federal penalties – two years longer than originally mandated under the law, the Washington Post reported.
Meanwhile, companies with 100 workers or more are also being given an additional grace period, but with certain caveats. Instead of being required by 2015 to offer coverage to 95 percent of their workers, bigger employers can now avoid government penalties if they offer insurance to at least 70 percent of employees beginning next year.
The rule change was not entirely unexpected. The Post reported that administration officials had announced in July that employer requirements would be postponed this year until 2015.
The employer mandate, like the individual requirement to purchase health insurance under Obamacare, was supposed to take effect in January. But Republicans have accused the administration of changing the law because of its growing unpopularity, with many stating that the White House is improperly carving out exceptions in advance of the 2014 and, now, 2016 elections, so that Democrats who voted for it won’t be so vulnerable.
The latest changes have renewed calls from congressional Republicans to scrap the entire law, citing the latest rule changes as justification. They also repeated earlier criticism that the rule changes are unfair because individuals are still required to comply with their mandate to purchase insurance or pay a penalty.
“If unilateral delays were an Olympic sport, the White House would sweep the gold, silver, and bronze,” House Energy and Commerce Committee Chairman Fred Upton (R-Mich.) said in a statement. “The White House is in full panic mode, and rather than putting politics ahead of the public, it is time for fairness for all.”
A senior administration official who briefed reporters on the rule change said the Treasury Department decided to make the change because mid-sized businesses “need a little more time to adjust to providing coverage.”
Some business groups welcomed the delay.
“It’s welcome news, as is anything that helps employers figure this out and gives them time to comply,” said Michelle Neblett, director of labor and workforce policy for the National Restaurant Association. The groups nearly 500,000 members had been voicing concerns about the employee mandate and its expected costs.
But other groups warned that businesses still faced massive new costs under the law.
“What they’ve released is doing what they can to make some things that are not great policy more livable,” said oe Trauger, the National Association of Manufacturers’ vice president of human resources policy, according to the Post. “But at the end of the day, it’s not great policy.”