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Under the health law, companies with 50 or more workers must provide affordable coverage to their full-time employees or risk a series of escalating tax penalties if just one worker ends up getting government-subsidized insurance. Originally, that requirement was supposed to take effect Jan. 1. It will now be delayed to 2015.
The administration said businesses had raised concerns about the complexity of the requirements and pressed for more time for implementation. According to the Kaiser Family Foundation, 95 percent of employers with 50 or more workers already offer health benefits.
Elsewhere on Capitol Hill, senior administration officials defended the law and the delay.
Treasury Department health policy adviser Mark Iwry told the Ways and Means Committee that the administration’s one-year delay of the requirement for larger employers to offer coverage was in keeping with the agency’s longstanding legal authority to smooth the implementation of complicated new tax laws.
"On a number of prior occasions across administrations, this authority has been used to postpone the application of new legislation when immediate application would have subjected taxpayers to unreasonable administrative burdens or costs," Iwry said.
He cited a number of previous examples, from small business legislation to a tax on aviation fuel.
The inspector general’s office that monitors the Internal Revenue Service warned of possible problems for consumers submitting applications for health insurance in October.
Testifying before the House Oversight committee, Alan Duncan of the Treasury’s Inspector General office said the rush to be ready for open enrollment Oct. 1 may leave some technology not fully tested.
"The lack of adequate testing could result in significant delays and errors in accepting and processing ... applications for health insurance coverage," Duncan testified.
Administration officials said they are highly confident of a successful launch.
Associated Press writers Ricardo Alonso-Zaldivar and Jim Kuhnhenn contributed to this report.
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