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Politics

Obamacare Delayed For Businesses To 2015; California Insurers Limit Individual Coverage

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Affordable Care Act Anniversary

House Minority Leader Nancy Pelosi (D-San Francisco) marked the third anniversary of the Affordable Care Act at a press conference in March. (Tom Williams via Getty Images)

CBS SF Bay (con't)

Affordable Care Act Updates: CBSSanFrancisco.com/ACA

Health News & Information: CBSSanFrancisco.com/Health

WASHINGTON, D.C. (CBS/AP) — In a major concession to business groups, the Obama administration Tuesday unexpectedly announced a one-year delay, until 2105, 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 Barack 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 next 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.

Tuesday’s action is sure to anger liberals and labor groups, but it could provide cover for Democratic candidates in next year’s congressional elections.

The move undercuts Republican efforts to make the overhaul and the costs associated with new requirements a major issue in congressional races. Democrats are defending 21 Senate seats to the Republicans’ 14, and the GOP had already started to excoriate Senate Democrats who had voted for the health law in 2009.

Senior White House adviser Valerie Jarrett cast the decision as part of an effort to simplify data reporting requirements.

She said since enforcing the coverage mandate is dependent on businesses reporting about their workers’ access to insurance, the administration decided to postpone the reporting requirement, and with it, the mandate to provide coverage.

“We have and will continue to make changes as needed,” Jarrett wrote in a White House blog post. “In our ongoing discussions with businesses we have heard that you need the time to get this right. We are listening.”

Republicans called it a validation of their belief that the law is unworkable and should be repealed.

“Obamacare costs too much and it isn’t working the way the administration promised,” said Senate Republican leader Mitch McConnell of Kentucky. “The White House seems to slowly be admitting what Americans already know … that Obamacare needs to be repealed and replaced with common-sense reforms that actually lower costs for Americans.”

Also on Tuesday, UnitedHealthcare announced that it would stop selling individual policies in California at the end of the year to focus instead on its core business of group plans for large and small employers.

The insurer said “it has become more difficult to administer these plans in a cost-effective way.” It has less than 8,000 individual insurance customers in California.

The announcement came two weeks after Aetna Inc. said it also plans to exit California’s individual insurance market. Both insurers avoided participating in the state exchange that is being established as part of the Affordable Care Act.

State Insurance Commissioner Dave Jones said the departure of UnitedHealthcare and Aetna “means less choice” for consumers.

(Copyright 2013 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed)

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