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 The so-called employer mandate, which has been opposed by
businesses, was originally supposed to take effect in January under
the Patient Protection and Affordable Care Act, known as Obamacare.
But the administration granted a one-year delay in July.
The latest change, published in a 227-page final rule, allows
medium-sized businesses with 50-99 full-time workers to avoid a tax
penalty until 2016 for failing to offer health insurance. It also
allows larger employers to phase in coverage by offering a health
plan to 70 percent of their full-time workforce next year, rising to
95 percent in 2016.
Firms with fewer than 50 full-time workers are not required to
provide coverage under Obamacare, but could qualify for federal
subsidies through new health insurance marketplaces established
under Obamacare.
The regulation had been the subject of intense business lobbying and
drew a largely upbeat response from employer groups.
"I am quite pleasantly surprised," said Neil Trautwein of the
National Retail Federation, a Washington-based trade group. "This is
beginning to look more like something the business community can
live with."
But the change triggered another wave of Republican calls to
postpone Obamacare's mandate for individuals, which requires most
Americans to enroll in coverage by March 31 or pay a penalty in
their 2014 income taxes.
"Much like the individual mandate, the business mandate is bad for
middle-class families and it will harm economic growth. But the
answer to this problem is not random unilateral changes, stoking
uncertainty," House Republican Majority Leader Eric Cantor said in a
statement.
"It's time to stop creating more chaos and delay Obamacare for all
Americans."
Analysts said the change could help vulnerable Democrats in
November's midterm elections battle for control of Congress by
delaying a potential crescendo of complaints from small-business
leaders, a theme Republicans also picked up on.
"It is clear Democrats don't think they can survive politically if
Obamacare is allowed to fully go into effect," said Dave Camp,
Republican chairman of the powerful House Ways and Means Committee.
Medium-sized businesses employ about 7.9 million people in the
United States, according to data provided by the Treasury
Department. That number is dwarfed by the 31.3 million employed by
firms with fewer than 50 full-time workers and another 74.3 million
who work for companies with 100 employees or more.
Not all business reaction was positive.
Thomas Donahue, president and chief executive of the powerful U.S.
Chamber of Commerce, said other steps were necessary to reduce "the
significant harm this law is inflicting on businesses of all sizes."
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"This short-term fix also creates new problems for companies by
moving the goal posts of the mandate modestly when what we really
need is a time-out," Donahue said.
Treasury officials described the mandate's two-year phase-in for
larger employers as a gesture to help companies cope with a new
definition of full-time employment that begins with an average of 30
hours a week rather than the traditional 40 hours. The regulation
also allows employers to determine whether an employee is full-time
by averaging work hours over a period of up to 12 months.
President Barack Obama's signature domestic policy aims to extend
health coverage to millions of uninsured Americans by allowing
individuals and smaller employers to purchase subsidized private
health insurance in new marketplaces set up in all 50 states.
The rules finalize draft proposals issued in December 2012 and took
into consideration comments from businesses and congressional
members, the Treasury Department said.
The regulations clarify that government volunteers, such as
firefighters and emergency responders, are not considered full-time
employees, an uncertainty that worried state and local governments.
Teachers and other education employees will not be treated as
part-time for the year even though their schools are closed or
their work hours are limited in the summer, the rules said.
Additional safe harbors in the rules aim to make it easier for
businesses to determine whether the coverage they offer is
affordable to employees.
For adjunct college teachers, who were struggling with how to count
all the hours they work, they can include two-and-a-quarter hours of
work outside the classroom for each hour of classroom teaching they
have a week.
For coverage of an employee's spouse and children, the final rules
spare businesses from dependent coverage in 2015, as long as
businesses are taking steps to offer this coverage in 2016.
(Additional reporting by David Morgan; editing by Karey Van Hall,
Peter Cooney, Amanda Kwan and Andre Grenon)
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