Washington-- Businesses that do not insure their employees will be exempt from penalties until 2015, the Internal Revenue Service announced late Tuesday.
"As we make these changes, we believe we need to give employers more time to comply with the new rules," wrote Valerie Jarrett, a senior adviser to the president, in a White House blog. "Since employer responsibility payments can only be assessed based on this new reporting, payments won't be collected for 2014."
"We have heard concerns about the complexity of the requirements and the need for more time to implement them effectively," wrote Mark J. Mazur, assistant Treasury secretary for tax policy, in an IRS blog.
"We recognize that the vast majority of businesses that will need to do this reporting already provide health insurance to their workers, and we want to make sure it is easy for others to do so," Mazur said.
This gives the IRS more time to simplify reporting requirements, as well as for businesses to get up to speed with reporting systems. The government still encourages businesses to voluntarily begin reporting in 2014 so they will be ready for 2015.
Business groups responded to the announcement almost immediately.
"We commend the Administration's wise move to delay the employer reporting and penalty obligations under the Affordable Care Act," said National Retail Association President Neil Trautwein in a statement. "This one-year delay will provide employers and businesses more time to update their health care coverage without threat of arbitrary punishment."
This does not affect businesses with fewer than 50 workers, who were already exempt from that rule. Most large businesses already offer coverage to their employees.
It also does not change the individual mandate, which requires most Americans to purchase insurance. Jarrett said the online health exchanges will still be up Oct. 1. Exchanges are websites where consumers can shop for and buy health insurance.