US delays key Obamacare provision to 2015

In a major setback to President Barack Obama's landmark healthcare law, a key provision requiring businesses to provide their workers with health insurance or face fines will be delayed until 2015.

Announcing the postponement, the Treasury Department, which is tasked with implementing the employer mandate Tuesday said the decision was in response to concerns expressed by business owners about the law's complex reporting requirements.

Under the Affordable Care Act, nicknamed 'Obamacare', businesses employing 50 or more full-time workers that don't provide them health insurance were to be penalised from January 1, 2014. The extra year before the requirement goes into effect will allow the government time to assess ways to simplify the reporting process for businesses, an official said.

Penalties for firms not providing health coverage to employees will now begin in 2015 - after next year's congressional elections.

The new delay will not affect other aspects of the health law, including the establishment of exchanges in states for low-income Americans to obtain health insurance.

The Republican party, which has symbolically repealed the measure 36 times in the House of Representatives controlled by it, reacted to the announcement with unconcealed glee.

"This announcement means even the Obama administration knows the 'train wreck' will only get worse," House Speaker John Boehner wrote.

"Obamacare costs too much and it isn't working the way the administration promised," Mitch McConnell, the Senate Minority Leader, wrote in response to the decision.

The administration defended the delay with Valerie Jarrett, a senior adviser to Obama, calling it as proof the White House has heard the concerns of the business community.

"As we implement this law, we have and will continue to make changes as needed. In our ongoing discussions with businesses we have heard that you need the time to get this right," she said in a post on the White House blog. "We are listening."

(Arun Kumar can be contacted at arun.kumar@ians.in)