Another delay in health law's employer requirement

President Barack Obama speaks about his signature health care law, Thursday, Nov. 14, 2013.
President Barack Obama speaks about his signature health care law, Thursday, Nov. 14, 2013.
Charles Dharapak/AP

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Trying to limit election-year damage on health care, the Obama administration Monday granted business groups another delay in a much-criticized requirement that larger firms cover their workers or face fines.

In one of several concessions in a complex Treasury Department regulation, the administration said companies with 50 to 99 employees will have an additional year to comply with the coverage mandate, until January 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.

The move will affect thousands of businesses in California. Census figures indicate there are 14,111 businesses that employ 50 to 99 workers in the state, said Micah Weinberg,  a senior policy advisor for the Bay Area Council in San Francisco. 

Medium-sized businesses will likely be relieved by the delay, said Weinberg. But he adds that "in the background," those firms may be "wondering what other changes will be made." 

He said this latest change casts further doubt on whether overall implementation of the law will go as planned.

"The affordable care act rests on the pillar of shared responsibility – individuals, employers, the government - all doing their part," Weinberg said. "And as these changes continue to be made I think the question is are we preserving enough of this reform to actually have it work in practice?” 

John Kabateck , California Executive Director of the National Federation of Independent Businesses, said while he, too, expects most medium-sized firms to welcome the delay – it’s still not enough.  He said that’s because the Affordable Care Act penalizes firms that grow beyond 50 employees by requiring them to provide health insurance to workers.

"Instead of moving the goal posts, instead of making this patchwork fix here and there, what small business owners need is [a] health care law that actually works, that’s going to help them create jobs and not be a disincentive to grow," Kabateck said. 

Some major business organizations were quick to praise the administration's compromise.

"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.

Under President Barack Obama's health care law, most small businesses don't have to offer coverage. There is nomandate on firms with fewer than 50 employees.

But for companies with 50 or more workers, the coverage requirement was originally supposed to have taken effect this year. The administration's announcement last summer of a one-year delay was the first sign of potential problems with the rollout of President Barack Obama's health care law.

Since then, the rollout of the law has resembled a gigantic crisis management drill. The new online signup system at was crippled by technical problems for the better part of two months last fall. Separately, millions of people who were already buying health insurance individually had those policies cancelled because the plans did not meet the law's requirements.

Republicans decided to again make the health care law their top issue in the midterm congressional elections, hoping to take control of the Senate by unseating vulnerable Democrats who voted for the law back in 2010.

The actions Monday by the administration could help those Democrats, defusing Republican charges that the law is a "job killer."

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 right around 30 hours.

— Volunteer firefighters and others who give of their time will not be considered employees for 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.

This story was updated at 6:22 p.m. Feb. 10, 2014.