WASHINGTON – Angling to avoid political peril, the Obama administration Monday granted employers another delay in a heavily criticized requirement that larger firms cover their workers or face fines.
In one of several concessions in a complex Treasury Department regulation of more than 200 pages, the administration said companies with 50 to 99 employees will have an additional year to comply with the coverage requirement, until Jan. 1, 2016.
For businesses with 100 or more employees, the requirement will still take effect in 2015. But other newly announced provisions, affecting technical issues such as the calculation of working hours, may help some of those firms.
More than 90 percent of companies with 50 or more employees already cover their workers without the government telling them to do so, but the debate has revolved around the potential impact on new and growing firms. Most small businesses have fewer than 50 workers and are exempt from the mandate. However, employer groups were also uneasy with a requirement that defines a full-time worker as someone averaging 30 hours a week.
Republicans trying to take control of the Senate in the November elections have once again made President Barack Obama’s health care law their top issue, casting it as a job-killer. They want to use the employer mandate to build that case, with anecdotes of bosses reluctant to hire a 50th worker, or slashing the hours of low-wage workers who need to pay household bills. Monday’s moves by the administration seemed calibrated to reduce that risk.
The reaction of business groups was mixed.
“These final regulations secured the gold medal for greatest assistance to retailers, and other businesses, and our employees,” said Neil Trautwein, a vice president of the National Retail Federation.
The U.S. Chamber of Commerce was unimpressed, calling it more of a respite than a fundamental change.
“This short-term fix also creates new problems for companies by moving the goalposts of the mandate modestly when what we really need is a time-out,” President Thomas Donohue said in a statement.
The administration still hasn’t issued rules for reporting requirements for business and insurers.
Administration officials and the law’s supporters said the concessions were the sorts of reasonable accommodations that regulators make all the time when implementing major new legislation. The Treasury department said Secretary Jacob Lew was well within his legal authority in making the changes.
“This common-sense approach will protect employers already providing quality insurance, while helping to ensure that larger employers are prepared to meet their responsibility to their hard-working employees,” said House Minority Leader Nancy Pelosi, D-Calif.
But Republicans said they smelled fear.
“It is clear Democrats don’t think they can survive politically if Obamacare is allowed to fully go into effect,” said Rep. Dave Camp, R-Mich., who as chairman of the Ways and Means Committee oversees the tax penalties enforcing the mandate.
The law passed in 2010 required employers with more than 50 employees working 30 or more hours a week to offer them suitable health coverage or pay a fine. The coverage requirement was originally supposed to have taken effect this year.
But last summer, the administration announced a one-year delay, the first sign of potential problems with the rollout of the health care law.
In other provisions announced Monday, the administration said:
• Companies will not face fines if they offer coverage to 70 percent of their full-time employees in 2015, although they will have to ramp that up to 95 percent by 2016. The law defines “full time” as people working an average of 30 hours a week per month. That concession is expected to help firms who have a lot of workers averaging around 30 hours.
• Volunteer firefighters and others who give of their time will not be considered employees under the law. Some volunteer fire departments worried they might have to shut down if forced to provide health insurance.
• Adjunct faculty members at colleges will be deemed to have worked 2 hours and 15 minutes for each hour of classroom time they are assigned to teach. Officials said that means someone teaching 15 hours a week in the classroom would be considered “full time” and eligible for coverage, but someone teaching 12 hours may be considered part time.
• A one-year delay in a requirement that employers offer coverage to dependents of full-time workers. Companies working to meet the goal will have until 2016 to comply.