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. ||||| Wal-Mart Stores Inc. (WMT), the largest private-sector employer in the U.S., will cut medical benefits to about 30,000 workers in response to mounting health-care costs and the growth of alternatives available under Obamacare. 
 
 Wal-Mart will no longer provide health coverage to employees who work less than 30 hours a week, according to a statement today on its website. The change is in line with moves by fellow retailers, including Target Corp. (TGT), Home Depot Inc. (HD) and Walgreen Co. (WAG), the company said. 
 
 “We don’t make these decisions lightly, and the fact remains that our plans exceed those of our peers in the retail industry,” Sally Welborn, senior vice president of global benefits, said on the company’s blog. 
 
 The U.S. Patient Protection and Affordable Care Act, known as Obamacare, doesn’t require companies to cover part-time workers, and offering them health plans may disqualify those people from subsidies in government-run insurance exchanges that opened last year. The coverage provided by the law softens the blow of companies eliminating benefits, said Ron Pollack, executive director of Families USA, a Washington-based group representing health-care consumers. 
 
 “People who are losing coverage can get it in a way that provides high-quality coverage at a much lower price,” he said. “Many of these people will be better off.” 
 
 Photographer: David Paul Morris/Bloomberg Wal-Mart Stores Inc., the world’s largest retailer, plans to stop offering health benefits to U.S. employees who work less than 30 hours a week. The change affects about 30,000 workers. Close Wal-Mart Stores Inc., the world’s largest retailer, plans to stop offering health... Read More Close Open Photographer: David Paul Morris/Bloomberg Wal-Mart Stores Inc., the world’s largest retailer, plans to stop offering health benefits to U.S. employees who work less than 30 hours a week. The change affects about 30,000 workers. 
 
 Previous Cutbacks 
 
 Today’s move, which affects about 2 percent of Wal-Mart’s 1.3 million U.S. employees, follows the retailer’s elimination of benefits for many new part-time workers in 2012. Wal-Mart, based in Bentonville, Arkansas, will rely on the firm HealthCompare Insurance Services Inc. to help employees find replacement coverage. 
 
 The world’s biggest retailer also is increasing premiums as it projects a more than $500 million rise in health-care spending this year. The company’s lowest-cost health plan -- its most popular offering -- will climb by $3.50 to $21.90 per pay period. Wal-Mart pays employees biweekly and covers 75 percent of its employees’ premiums. 
 
 Assuming the 30,000 part-time workers used the lowest-cost plan, eliminating their benefits would save the company about $50 million a year, according to Bloomberg estimates. 
 
 Wal-Mart shares fell 0.1 percent to $77.30 at the close today in New York. The stock has fallen 1.8 percent this year. 
 
 Target, based in Minneapolis, announced plans to drop coverage of part-time employees in January. 
 
 Obamacare Rules 
 
 The Obama administration has modified the law’s rules for employer health coverage, requiring companies with 100 or more workers to cover 70 percent of their full-time employees beginning next year. They must cover 95 percent of full-timers beginning in 2016, when the mandate will be extended to companies with 50 or more workers. Those that don’t comply may be liable for fines of as much as $3,000 per worker. 
 
 The Affordable Care Act created new government-run health insurance exchanges to sell coverage to uninsured people, often with premiums discounted by federal subsidies. It disqualifies Americans for subsidies at the exchanges if they have an offer of “affordable” coverage from their employers, defined as an insurance premium less than 9.5 percent of their income. 
 
 White House press secretary Josh Earnest said today that the administration wouldn’t comment on a decision by an individual company. He said that before the health-care law was passed, it wasn’t uncommon for workers to find their insurance benefits cut or eliminated. 
 
 “The difference now is that those 30,000 employees from Wal-Mart who no longer have access to insurance through their employer now do have a legitimate alternative where they can acquire high-quality, affordable health care,” he told reporters traveling with President Barack Obama to a fundraiser in New York. 
 
 With the exchanges set up under the Affordable Care Act “these individuals now have somewhere to turn in terms of getting health care for themselves and their families,” he said. 
 
 To contact the reporters on this story: Renee Dudley in Boston at rdudley6@bloomberg.net; Craig Giammona in New York at cgiammona@bloomberg.net 
 
 To contact the editors responsible for this story: Nick Turner at nturner7@bloomberg.net
– 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.