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Obamacare Mandate for Many Businesses Pushed Back a Year


Small and medium-sized business will have yet another year to comply with Obamacare.


Late Monday, the Obama administration said companies with between 50 and 99 employees would not have to make required payments under Obamacare until 2016 -- a year later than planned. Under the law, companies have to meet certain coverage requirements or pay a penalty of as much as $2,000 per worker.

Companies with more than 100 employees still have to comply by 2015, the Treasury Department said. However, they do get a break. These companies can avoid penalties by offering coverage to 70 percent of their full-time employees in 2015 and 95 percent starting in 2016. Companies with fewer than 50 employers are largely exempt already.

Related: Aetna CEO Says Company May Opt Out of Obamacare

The delay is one of a long line of pushbacks for Obamacare, which saw a rocky rollout for individuals late last year. Systems for signing up members failed, forcing the government to delay compliance and walk back certain coverage requirements. Because of complaints from the business community, the employer mandate under the Affordable Care Act had been pushed back last July for all companies, from 2014 to 2015. The new delay lengthens that period for a full year.

Companies are getting some other breaks. For instance, employers won’t have to cover seasonal workers, defined as those working for fewer than six months. 

Also, new rules clarify the sticking point of whether volunteers are considered full-time workers. Businesses that employ a large number of volunteers, like local fire departments, will not have to provide coverage under the law now.

Related: How Both Parties Were Wrong About Obamacare and Jobs

The government seems keen to stop companies from shedding workers to get around the Obamacare requirements. Under new rules issued Monday, companies with fewer than 100 workers will have to certify to the government that they haven’t fired workers to qualify for the new delay to 2016. They also must certify that they won’t stop offering insurance plans that are already in place. 

The latest delay is sure to feed fire to the debate over whether the administration has the authority to make so many changes to the law, which passed with no Republican support. Some have argued the Constitution precludes the administration from making so many changes to Obamacare, and that, rather than modification, the law should be repealed.

Related: With Individual Mandate Softened, Americans Are Paying Unfair Obamacare Tax

Ray Hennessey

Written By

Ray Hennessey is the former editorial director of Entrepreneur.