Obamacare delay extended for some firms

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US President Barack Obama meets with health insurance chief executives at the White House in Washington 15 November 2013Image source, Reuters
Image caption,
Barack Obama met insurance company executives in November to discuss how delays in his healthcare law would impact their firms

A key provision of President Barack Obama's healthcare law affecting medium-sized business has been delayed again, the latest trouble for the act.

Firms with 50-99 employees will not face a tax penalty until 2016 if they fail to provide health insurance to their workers, it was announced.

The requirement for companies with over 50 workers to offer health coverage had already been delayed a year until 2015.

The reform has been beset by technical problems and political opposition.

It aims to extend health coverage to millions of uninsured Americans, partially by imposing tax penalties on individuals who do not carry health insurance and on some companies that do not offer it to their employees.

'Moving the goalposts'

The change, announced by the treasury department on Monday, also amended the requirements for companies with 100 or more employees - they must only offer coverage to 70% of their full-time workers in 2015, and 95% of their employees in 2016.

A treasury official told the National Journal that companies would have to prove they were not shedding workers in order to qualify for the additional time.

The law only requires business with 50 or more employees to offer health insurance coverage. Individuals not covered by an employer or government plan will face a tax penalty in 2014 if they do not purchase insurance on their own.

One business group, the National Retail Foundation, praised the newly announced implementation delay for medium-sized companies.

It said the regulations "secured the gold medal for greatest assistance to retailers, and other businesses, and our employees".

But the conservative US Chamber of Commerce, America's largest business lobby group, said the delay caused "new problems for companies by moving the goalposts of the mandate modestly when what we really need is a time-out".

The Democratic president's flagship domestic achievement was passed in 2010 with no support from the Republicans, who have sought to undermine or repeal it at every turn.

The Patient Protection and Affordable Care Act, also known widely as Obamacare, has been bedeviled by problems and postponements during its roll-out.

Last week, congressional budget analysts predicted the health law would cut the US workforce by the equivalent of 2.3 million workers by 2021.