Officials Say Employer Mandate Delay Will Not Hinder ACA in Calif.

The Obama administration's decision to delay for one year a requirement that large companies provide health insurance coverage to workers will not hinder California's implementation of the Affordable Care Act, state officials said Tuesday, the Sacramento Bee reports (Sanders, Sacramento Bee, 7/3).

Details of Employer Mandate

Under the ACA, businesses with at least 50 workers beginning in 2014 must pay a penalty of $2,000 per employee if they do not provide affordable coverage to their employees. Employers will not be required to pay for the first 30 workers who are included in the penalty calculation (California Healthline, 5/23).

The mandate has spurred broad opposition from both Democrats and Republicans, but lawmakers have moved slowly to address it.

Details of Obama Administration's Announcement

In a pair of announcements posted late Tuesday on the White House blog and the Department of Treasury blog, officials said the employer coverage mandate will be delayed until 2015 to provide businesses with more time to comply with its reporting requirements. The blog posts did not suggest that there will be a similar delay for the individual mandate, which is scheduled to take effect next year (Calmes/Pear, New York Times, 7/2).

In the White House blog post, Valerie Jarrett -- a senior adviser to President Obama -- wrote, "We believe we need to give employers more time to comply with the new rules." She added, "This allows employers the time to ... make any necessary adaptations to their health benefits while staying the course toward making health coverage more affordable and accessible for their workers" (Goldfarb/Somashekhar, Washington Post, 7/2).

Response From California Officials, Observers

State Insurance Commissioner Dave Jones (D) said that the Obama administration's decision "will not have a long-lasting effect, nor does it undermine the overall effectiveness" of the ACA.

According to Jones, if workers at large companies do not have access to health insurance coverage next year, they will be able to buy health plans through the exchange. Some of them might be eligible for federal subsidies to help purchase exchange policies, depending on their income, he said.

Anthony Wright -- director of Health Access -- agreed that the decision to delay the employer mandate for one year will have little effect on ACA implementation in California (Sacramento Bee, 7/3). However, he said, "It's really critical that this one-year delay doesn't turn into a multi-year delay because the employer responsibility provision is very important for the long-term sustainability of our health system" (Aliferis, "State of Health," KQED, 7/2).

In response to the decision, Anne Gonzales -- spokesperson for Covered California -- said that the state's health insurance exchange sells insurance coverage to individuals and small employers, not to large firms. She said that the decision will not affect the timing or the content of policies offered through the exchange (Sacramento Bee, 7/3).

Response From Lawmakers, Stakeholders Across the U.S.

The business community immediately welcomed the administration's announcement. Randy Johnson, a senior vice president at the U.S. Chamber of Commerce, said, "The administration has finally recognized the obvious -- employers need more time and clarification of the rules of the road before implementing the employer mandate" (Dorning/Wayne, Bloomberg, 7/3).

E. Neil Trautwein, a vice president of the National Retail Federation, said the delay "will provide employers and businesses more time to update their health care coverage without threat of arbitrary punishment" (New York Times, 7/2).

However, some ACA opponents and Republican lawmakers used the delay announcement to highlight failures with the law, Kaiser Health News reports.

Amanda Austin -- director of federal public policy at the National Federation of Independent Business -- said the decision is "simply the latest evidence that implementation of this terrible law is going to be difficult if not impossible," adding, "Temporary relief is small consolation" (Galewitz, Kaiser Health News, 7/2).

House Speaker John Boehner (R-Ohio) in a statement said, "This announcement means even the Obama administration knows the 'train wreck' will only get worse." Boehner called on the administration to also delay implementation of the individual mandate and "release American families from the mandates of this law as well." He added that Tuesday's decision "is a clear acknowledgment that the law is unworkable, and it underscores the need to repeal the law and replace it with effective, patient-centered reforms."

Senate Minority Leader Mitch McConnell (R-Ky.) reiterated calls to "repeal and replace" the ACA, adding in a statement that "Obamacare costs too much and it isn't working the way the administration promised."