The Obama administration announced yesterday that it will delay by one year the Affordable Care Act requirement that employers with 50 or more employees offer health insurance to their employees or face a penalty.  The administration notes that its action will meet two goals.  First, it will allow the government to consider ways to simplify new reporting requirements.  Second, it will provide time to adapt health coverage and reporting systems while employers move toward making health coverage affordable and accessible for their employees.

The administration’s announcement does not impact the Affordable Care Act provision that requires most Americans to have health insurance on January 1, 2014, nor does it affect the October 1 scheduled start of online Health Insurance Marketplaces or the subsidies intended to help individuals with low to middle incomes purchase insurance.

The implications for the delay are still somewhat unclear.  Most large employers (94% according to a Kaiser Health News article quoting Ron Pollack of Families USA) already provide insurance to their employees.  Individuals whose employers do not offer coverage, and now are not required to do so until 2015, will still have to have insurance in 2014.  This ostensibly means that they will have to purchase their insurance through or outside of the Marketplace.  Additionally, although most large employers do provide insurance, the benefits packages vary widely.

Employer groups praise the delay, while advocates for health care reform worry about the consequences of the decision.  These concerns include more workers losing employer-sponsored health insurance and reduced revenue for the federal government resulting from uncollected penalties levied on employers that choose not to offer affordable health insurance to their employees.

The repercussions of this delay will continue to play out in the days and weeks to come against the backdrop of the federal and state governments gearing up for open enrollment in October.