Dealers, small businesses get further delay in health-care coverage rules

The Obama administration said Monday that employers won't have to cover seasonal workers and workers employed less than six months.

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WASHINGTON (Bloomberg) -- Employers with fewer than 100 workers, including many new-car dealers, won't have to provide health insurance until 2016 under the U.S. Affordable Care Act, as the administration said it would again delay a key requirement of the health law.

Larger firms have to cover at least 70 percent of the workforce starting next year, the Internal Revenue Service said in a rule issued Monday.

The Patient Protection and Affordable Care Act envisioned as a cornerstone of its expansion of U.S. insurance coverage that employers with 50 or more workers would be required to provide health benefits to their employees.

The average U.S. car dealership had 55 employees in 2012, the National Automobile Dealers Association says.

NADA responds

While NADA officials said Monday they had not reviewed the proposed changes in detail, the group said auto dealerships, like other small businesses, "will benefit from the additional time to address health care coverage issues" under the act.

"We are concerned about any potential negative effects that may be caused by the uncertainty of shifting deadlines for individual dealership employees," NADA said in a statement. "NADA will continue to urge dealers not to wait, but to seek professional advice now so that they can understand and be better prepared to do what is best for their businesses and their employees, both today and in the future."

Under pressure from business groups, the Obama administration has weakened the health care coverage requirement since July, first by delaying enforcement of the mandate until 2015. Many firms will have even more time under the regulation issued Monday.

"While about 96 percent of employers are not subject to the employer responsibility provision, for those employers that are, we will continue to make the compliance process simpler and easier to navigate," Assistant Secretary for Tax Policy Mark J. Mazur said in a statement. "Today's final regulations phase in the standards to ensure that larger employers either offer quality, affordable coverage or make an employer responsibility payment starting in 2015 to help offset the cost to taxpayers of coverage or subsidies to their employees."

The rule provides employers far more flexibility than allowed by the language of the health law, which levies fines of as much as $3,000 per worker against firms that don't comply with the requirement.

Republican criticism

Republicans have criticized President Barack Obama for appearing to unilaterally change the terms of the health-care overhaul for select groups, including employers and insurers.

They have called on him to delay the law's requirement that most individual Americans carry health insurance or pay a fine, which took effect Jan. 1. He has declined.

The U.S. Treasury secretary has broad authority under the tax code to implement laws such as the health-care overhaul in ways that will encourage compliance, including by phasing in requirements, senior administration officials told reporters in a conference call.

Among other exemptions, the administration said in the rule issued Monday that employers won't have to cover seasonal workers and those employed less than six months.

Employers with fewer than 100 workers will have to certify to the government that they haven't fired workers to get under the threshold and qualify for the delay until 2016. They also must certify they won't drop health plans they already offer, officials said.

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