WASHINGTON — President Barack Obama’s health care law, hailed as his most significant legislative achievement, seems to be losing much of its sweep.
On Tuesday, the administration unexpectedly announced a one-year delay, until after the 2014 elections, in a central requirement of the law that medium and large companies provide coverage for their workers or face fines.
Separately, opposition in the states from Republican governors and legislators has steadily undermined a Medicaid expansion that had been expected to provide coverage to some 15 million low-income people.
Tuesday’s move — which caught administration allies and adversaries by surprise — sacrificed timely implementation of Obama’s signature legislation but might help Democrats politically by blunting an election-year line of attack Republicans were planning to use. The employer requirements are among the most complex parts of the health care law, 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.
“We commend the administration’s wise move,” said Neil Trautwein, a vice president of the National Retail Federation. It “will provide employers and businesses more time to update their health care coverage without threat of arbitrary punishment.”
Under the health 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 Jan. 1, 2014. It will now be delayed to 2015.