WASHINGTON — In a significant setback for President Obama’s signature domestic initiative, the administration on Tuesday abruptly announced a one-year delay, until 2015, in his health care law’s mandate that larger employers provide coverage for their workers or pay penalties. The decision postpones the effective date beyond next year’s midterm elections. 
 
 Employer groups welcomed the news of the concession, which followed complaints from businesses and was posted late in the day on the White House and Treasury Web sites while the president was flying home from Africa. Republicans’ gleeful reactions made clear that they would not cease to make repeal of Obamacare a campaign issue for the third straight election cycle. 
 
 While the postponement technically does not affect other central provisions of the law — in particular those establishing health insurance marketplaces in the states, known as exchanges, where uninsured Americans can shop for policies — it threatens to throw into disarray the administration’s effort to put those provisions into effect by Jan. 1. 
 
 “I am utterly astounded,” said Sara Rosenbaum, a professor of health law and policy at George Washington University and an advocate of the law. “It boggles the mind. This step could significantly reduce the number of uninsured people who will gain coverage in 2014.” 
 
 At the White House, Tara McGuinness, a senior adviser on the law, disputed that. 
 
 “Nothing in the new guidance regarding employer reporting and responsibility will limit individuals’ eligibility for premium tax credits to buy insurance through the marketplaces that open on Oct. 1,” she said. 
 
 Under the law, most Americans will be required to have insurance in January 2014, or they will be subject to tax penalties. The announcement on Tuesday did not say anything about delaying that requirement or those penalties. 
 
 Administration officials sought to put the action in a positive light in the online announcements, and they emphasized that the existing insurance coverage of most Americans would not be affected. 
 
 “We have heard concerns about the complexity of the requirements and the need for more time to implement them effectively,” Mark J. Mazur, an assistant Treasury secretary, wrote on the department’s Web site. “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.” 
 
 The 2010 Affordable Care Act required employers with more than 50 full-time workers to offer them affordable health insurance starting next year or face fines. Some companies with payrolls just above that threshold said they would cut jobs or switch some full-time workers to part-time employment so that they could avoid providing coverage. 
 
 Under the provision to set up state-based marketplaces, subsidies are supposed to be available to many lower- and middle-income people who do not have access to coverage from employers or other sources. It may be difficult, however, for officials running the exchanges to know who is entitled to subsidies if employers do not report information on the coverage they provide to workers. 
 
 Enrollment in the exchanges is to begin Oct. 1, with insurance coverage taking effect on Jan. 1. “We are on target to open the health insurance marketplace on Oct. 1 where small businesses and ordinary Americans will be able to go to one place to learn about their coverage options and make side-by-side comparisons of each plan’s price and benefits before they make their decision,” Valerie Jarrett, Mr. Obama’s senior adviser and liaison to the business community, wrote on the White House Web site. 
 
 But even some supporters of the law dispute that the establishment of the health insurance exchanges is on schedule, especially since progress varies by state and some Republican-led states are resisting the health care law and withholding resources for putting it into effect. 
 
 Much of the administration’s public effort, especially at the Department of Health and Human Services, has been directed toward spreading the word to uninsured Americans, especially younger and healthy individuals whose participation is needed to help keep down premiums for everyone else. About 85 percent of Americans are insured, so most individuals will be unaffected, at least initially. 
 
 Behind the scenes, however, the administration has been fielding questions and criticisms from businesses about the reporting requirements — especially the Treasury Department, which has responsibility, given its oversight of the tax reporting system. 
 
 Employer groups were quick to applaud the delay. At the U.S. Chamber of Commerce, which has strongly opposed the law, Randy Johnson, senior vice president for labor, immigration and employee benefits, said in a statement, “The administration has finally recognized the obvious — employers need more time and clarification of the rules of the road before implementing the employer mandate.” 
 
 E. Neil Trautwein, a vice president of the National Retail Federation, said the delay “will provide employers and businesses more time to update their health care coverage without threat of arbitrary punishment.” 
 
 Mr. Mazur, the Treasury official, said the delay “will allow us to consider ways to simplify the new reporting requirements consistent with the law.” 
 
 “Second,” he added, “it will provide time to adapt health coverage and reporting systems while employers are moving toward making health coverage affordable and accessible for their employees.” 
 
 Within the next week, Mr. Mazur said, Treasury will issue official guidance to insurers, self-insuring employers and other parties that provide health coverage. Formal rules will be proposed this summer, he added, but the administration will encourage employers to comply with the law’s reporting provisions in 2014, as originally mandated. 
 
 Democrats were all but silent on the news, but a spokesman for Senator Harry Reid of Nevada, the majority leader, released a statement late Tuesday. “Both the administration and Senate Democrats have shown — and continue to show — a willingness to be flexible and work with all interested parties to make sure that implementation of the Affordable Care Act is as beneficial as possible to all involved,” the spokesman, Adam Jentleson, said. “It is better to do this right than fast.” 
 
 But Republicans immediately reacted with statements claiming vindication for their efforts to repeal the law altogether. 
 
 Senator John Barrasso, Republican of Wyoming, called the administration action “a cynical political ploy to delay the coming train wreck associated with Obamacare until after the 2014 elections.” 
 
 And Senator Mitch McConnell, the Senate Republican leader, who faces re-election next year in Kentucky, said in a statement, “The fact remains that Obamacare needs to be repealed and replaced with common-sense reforms that actually lower costs for Americans.” ||||| The ObamaCare employer mandate requiring businesses to provide their workers with health insurance will be delayed by a year, the administration said Tuesday in a stunning announcement. [WATCH VIDEO] 
 
 Delaying the requirement until 2015 is an enormous victory for businesses that had lobbied against the healthcare law. 
 
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 It also means one of healthcare reform’s central requirements will be implemented after the 2014 midterm elections, when the GOP is likely to use the Affordable Care Act as a vehicle to attack vulnerable Democrats. 
 
 White House officials cast the delay as a decision necessary to give employers more time to comply with the rules, while Republicans said it showed President Obama's signature legislative achievement was fatally flawed. 
 
 Former Obama adviser David Axelrod on Wednesday insisted history would look kindly on the law. 
 
 President Obama’s “view is that we ought to plow forward, make sure this can work, and we're going to look back at it, and it's going to be our proudest accomplishment," Axelrod said on MSNBC's "Morning Joe." 
 
 In a White House blog post, senior adviser Valerie Jarrett wrote Tuesday that the delay would give employers more time to adjust to the system. 
 
 “This allows employers the time to test the new reporting systems and make any necessary adaptations to their health benefits while staying the course toward making health coverage more affordable and accessible for their workers,” Jarrett wrote. 
 
 Jarrett also wrote that the delay would help in “cutting red tape and simplifying the reporting process.” 
 
 “We have heard the concern that the reporting called for under the law about each worker’s access to and enrollment in health insurance requires new data collection systems and coordination,” Jarrett said. “So we plan to re-vamp and simplify the reporting process.” 
 
 The Treasury Department’s announcement does not affect the individual mandate, which requires most taxpayers to either purchase insurance or pay a penalty, and administration officials said on Tuesday that other aspects of the law wouldn’t be delayed. 
 
 The law’s critics have framed that as a double standard, accusing the administration of acknowledging the law’s complexity for businesses without offering a similar break to the individual workers who still have to buy insurance. The employer mandate affected businesses with more than 50 workers. 
 
 “That the Obama administration is putting off this job-killing requirement on employers, but not individuals and families, shows how deeply flawed the president’s signature domestic policy achievement is,” said Sen. Orrin Hatch (Utah), the ranking Republican on the Senate Finance Committee. 
 
 “While a delay of this mandate is welcome news since it shows the challenges the employers are facing complying with it, a delay — conveniently past the 2014 election — only adds to the uncertainty these job creators face because of ObamaCare,” Hatch said. 
 
 Other Republicans seized on the news, arguing that the delays suggested the law was a “train wreck” and that Democratic candidates in 2014 would have difficulty explaining the delay. 
 
 Speaker John Boehner (R-Ohio) and House Majority Leader Eric Cantor (R-Va.) renewed their calls for repealing the law in full. 
 
 “This further confirms that even the proponents of ObamaCare know it will hurt jobs, decrease economic growth and make it harder for families to have access to quality and affordable health care,” Cantor said in statement. 
 
 “Rather than continuing to delay the predictable pain until another Election Day has passed, we should scrap this entire law and instead implement patient-centered reforms before any more damage is done,” he said. 
 
 While GOP leaders were quick to react, hammering the delay as evidence that the law is unworkable, Democratic leaders were quieter Tuesday evening. One exception was Democratic National Committee Chairwoman Debbie Wasserman Schultz (Fla.), who tweeted that the decision shows Obama is “in it for long haul to fully implement” the healthcare law. 
 
 Adam Jentleson, a spokesman for Senate Majority Leader Harry Reid (D-Nev.) said the administration was showing "a willingness to be flexible.” 
 
 "It is better to do this right than fast,” said Jentleson in a statement. 
 
 Some Democrats had openly fretted about the law’s implementation. 
 
 Sen. Max Baucus (D-Mont.), one of the primary architects of the healthcare law, warned in April that small businesses were struggling to come to grips with their new responsibilities. 
 
 “Small businesses have no idea what to do, what to expect,” Baucus told Health and Human Services Secretary Kathleen Sebelius at a hearing. 
 
 “I just see a huge train wreck coming down,” Baucus said. 
 
 The Chamber of Commerce praised the delay. 
 
 “The administration has finally recognized the obvious: Employers need more time and clarification of the rules of the road before implementing the employer mandate,” said Randy Johnson, the Chamber’s senior vice president for labor, immigration and employee benefits. 
 
 “The Chamber has testified numerous times about the problems with the mandate, and we applaud the administration’s step to delay this provision. We will continue to work to alleviate this and other problems with ObamaCare.” 
 
 Many employers had threatened to cut employees’ hours to avoid the new requirements. 
 
 Employers had also complained about the mandate’s reporting provision. Rules on the requirement came out this year, leaving little time for businesses to respond and prepare. 
 
 “I hope that this means that employers who have been cutting employees to part-time will now call them back to full-time employment, but regret that the administration is delaying the implementation of an important provision of the ACA,” said Timothy Jost, a law professor at Washington and Lee University and a strong supporter of the healthcare law. 
 
 The change will likely mean that more people buy individual coverage through the law’s new insurance exchanges, which are expected to be open for enrollment by Oct. 1. 
 
 If fewer employees have access to coverage through work, at least some are likely to turn to the exchanges for coverage and the tax credit that helps cover the cost. 
 
 Hatch said he hoped that was not the administration’s goal, stating it could be a “backdoor attempt at getting more Americans into the exchanges, which have been plagued by problems.” 
 
 More people on the exchanges would also mean greater federal spending on the tax subsidies, increasing the law’s total cost. 
 
 Sabrina Corlette, a health policy expert at Georgetown University, said the move could be a boon to consumers because plans on the exchanges will be stronger than those offered by many employers. 
 
 She worried, however, that the employer mandate could be deferred again down the line. 
 
 “Anyone that’s been around politics long enough knows to be a little bit concerned,” Corlette said. “If a one-year delay is OK, how about a two-year delay? How about a three-year delay?” 
 
 The political effects of the delay could be more severe than the effect on the law’s expansion of healthcare coverage. One vulnerable Democrat, Sen. Mark Begich (Alaska), hailed the decision. 
 
 “I’m pleased the administration is listening to me and the many businesses that are concerned about the complexity of the new requirements,” said Begich, who is facing reelection in 2014. 
 
 In its most recent estimates before the delay was announced, the Congressional Budget Office said the number of people with employer-based coverage was not expected to change next year. 
 
 The penalty for employers that failed to offer coverage was also not expected to bring in any money next year, according to the CBO’s latest estimates. 
 
 The delay gives employers a free year to dump their workers into the law’s insurance exchanges, former Congressional Budget Office Director Douglas Holtz-Eakin said. 
 
 “Essentially for calendar 2014, the act of dropping coverage and dumping employees into the exchanges is on sale,” he said. “Drop and dump, but no penalty.” 
 
 —This story was posted at 5:37 on July 2 and was last updated at 10:08 a.m. on July 3. ||||| WASHINGTON — Millions of people facing the cancellation of health insurance policies will be allowed to buy catastrophic coverage and will be exempt from penalties if they go without insurance next year, the White House said Thursday night. 
 
 Kathleen Sebelius, the secretary of health and human services, disclosed the sudden policy shift in a letter to Senator Mark Warner, Democrat of Virginia, and five other senators. 
 
 It was another effort by President Obama to cushion the impact of the health care law and minimize political damage to himself and Democrats in Congress who adopted the law in 2010 over solid Republican opposition. 
 
 In recent weeks, insurers have told many people that their insurance policies were being canceled because they did not comply with the minimum coverage requirements of the law. Insurers usually offer to replace the coverage with new policies that do comply, providing more benefits at higher cost. 
 
 The Department of Health and Human Services issued a bulletin on Thursday advising consumers, “If you have been notified that your individual market policy will not be renewed, you will be eligible for a hardship exemption and will be able to enroll in catastrophic coverage.” 
 
 The help for people with canceled policies was offered late Thursday, just four days before the deadline for people to sign up for coverage that starts on Jan. 1. 
 
 Ms. Sebelius said the goal was to ensure “the smoothest possible transition” for people seeking new coverage after cancellation of their policies. 
 
 Mr. Obama initially tried to address a furor over the cancellations by asking carriers to reinstate the policies. But some insurers and some state officials did not go along with his request, so the White House looked for other ways to address the problem. 
 
 Before the action announced Thursday by the White House, Republicans had said it was likely that the number of cancellations would exceed the number of people obtaining private coverage through the new insurance exchanges this year. Nearly 365,000 people selected health plans in the exchanges in October and November, before a big increase reported early this month. 
 
 Catastrophic plans provide basic coverage and are generally available on the exchanges only to people who are under 30 or qualify for a hardship exemption from the requirement to carry insurance. 
 
 The White House action is sure to embolden Republicans clamoring for a broader exemption that would be available to all Americans. The White House opposes such an exemption, saying it would blow up the keystone of the 2010 law. 
 
 Mr. Warner and the five other senators said the hardship exemptions would provide “transition relief” to constituents who they said were upset about the cancellation of insurance policies. 
 
 The Obama administration broadly defined who can qualify. “If the consumer believes that the plan options available in the marketplace in their area are more expensive than their canceled health insurance policy, they will be eligible for catastrophic coverage through a hardship exemption,” the administration said. 
 
 Insurers, already struggling with problems caused by the chaotic debut of the federal insurance exchange in October, expressed surprise and dismay. 
 
 “This latest rule change could cause significant instability in the marketplace and lead to further confusion and disruption for consumers,” said Karen M. Ignagni, the president of America’s Health Insurance Plans, a trade group. 
 
 Another insurance executive said that insurers had not expected a significant number of people over 30 to enroll in catastrophic plans, so their costs were not factored into the premiums. 
 
 Moreover, the executive said, the exemptions undermine the requirement for people to have coverage. That requirement, often called an individual mandate, is needed to guarantee that insurers attract young healthy people to help offset the costs of covering older Americans who require more medical care, insurers say. 
 
 Ms. Sebelius said the premiums for catastrophic plans were, on average, about 20 percent lower than premiums for other plans available in the marketplace. Catastrophic policies cover three primary care visits a year at no cost and provide free preventive health benefits, but typically require consumers to pay most other medical costs up to a certain amount, usually several thousand dollars a year. 
 
 The move Thursday followed delays in many other parts of the health care law. 
 
 On July 2, the White House abruptly announced a one-year delay, until 2015, in a provision that requires larger employers to offer coverage to their workers or pay penalties. 
 
 On Nov. 27, it deferred a major element of the law that would allow small businesses to buy insurance online for their employees through the federal exchange. 
 
 Earlier, in April, the administration said that the federal exchange would not offer employees of a small business the opportunity to choose from multiple health plans in 2014. 
 
 And in October 2011, the administration scrapped a long-term care insurance program created by the new law, saying it was too costly and would not work.
– ObamaCare is still going into effect in 2014, but one key component of it is being temporarily shelved. The White House today postponed by one year a rule requiring employers to either provide coverage to employees or face hefty fines, reports the Wall Street Journal. The rule will take effect in 2015, instead of 2014. "We have heard concerns about the complexity of the requirements and the need for more time to implement them effectively," writes Treasury official Mark Mazur in a blog post. The Journal explains that while most employers already provide such coverage, restaurants and retail companies in particular—both of which rely on low-wage workers—were resisting. The rule affects businesses with more than 50 workers. The Hill calls the decision "stunning" and says it "represents an enormous victory for businesses that had lobbied against the healthcare law." It also notes that the move pushes back the start of the controversial provision until after the 2014 midterms, which should be good news for vulnerable Democrats. The New York Times reports that other key parts of ObamaCare, including the establishment of "exchanges" where people can buy insurance, will take effect as planned in 2014. But "it will be difficult for officials running the exchanges to know who is entitled to subsidies if they are not able to confirm whether employers are offering insurance to their employees," writes Jackie Calmes.