Businesses react to health care act delay

Tim Mullaney | USA TODAY

Businesses reacted with relief to the Obama administration's decision to give large and midsize employers until 2015 to provide health care coverage for their workers or face fines.

Before the administration's announcement Tuesday, businesses with 50 or more employees had to provide affordable coverage to their full-time employees starting Jan. 1 or risk a series of penalties if even one worker ended up getting government-subsidized insurance.

Reaction marked a divide between representatives of big business, who mostly provide insurance already and were focused on complying with complex new reporting rules, and representatives of small business who said they need much bigger changes.

"This is a wise decision," says Bill Kramer, executive director for national health policy for the Pacific Business Group on Health. It represents national employers in all 50 states, including General Electric and Wal-Mart.

Small-business groups that opposed Obamacare entirely said the move didn't go far enough.

They are still lobbying for changes that will mandate coverage only for employees who work at least 40 hours a week, rather than 30, along with other fixes, said National Federation of Independent Business spokeswoman Cynthia Magnuson.

"This is a temporary fix and we need long-term relief,'' Magnuson said.

The delay may also calm the nerves of small business people, who have been reluctant to expand because of the new mandate, said Mark Cerminaro, senior vice president of small-business lending company RapidAdvance.

Since the economy is expected to be growing faster by late 2014, the delay will let small-company owners buy insurance or pay the penalties without worrying as much about how it will affect their businesses, he said.

"You have a tendency, where there's economic uncertainty already, to see individuals get a little more cautious,'' he said. ``With the extra time, they'll have an extra confidence level.''

Most large employers will still provide health insurance benefits — and wouldn't be subject to penalties — Kramer said. But the law's reporting requirements for those companies will still be an administrative burden, he said.

The decision to delay "is a recognition of how complex the implementation is," says Allan Zaremberg, CEO of the California Chamber of Commerce.

He says many regulations implementing the act weren't published until late last year and many companies wouldn't be ready to implement it.

More than 90% of the California Chamber of Commerce's member companies already offer coverage, he said.

Erik Stewart, who advises small-business owners at the Washington Small Business Development Center in Aberdeen, Wash., says the delay will let small-business owners overcome ``incorrect information" about what the law actually requires. Many employers with fewer than 50 employees mistakenly think they have to buy insurance, he said.

"What they hear on TV usually isn't the whole story, and so what has happened is that there is a culture of fear concerning these laws," says Stewart.

Contributing: Julie Schmit in San Francisco; Byron Acohido in Kingston, Wash.; Matt Krantz in Los Angeles, the Associated Press