(CBS News) After months of complaints and backlash, the administration is delaying what's called the "employer mandate" under the Affordable Care Act.
The mandate requires companies with more than 50 full-time employees to offer health insurance or pay a $2,000 penalty - but that rule is being suspended for a year until January of 2015. Most U.S. businesses with more than 50 employees already offer insurance, but the smaller, often startup, companies that do not complained loudly about the 21-page application required.
In an announcement from the Treasury Department on Tuesday, the administration said its decision was "designed to meet two goals," including reducing the amount of paperwork and working with small-company employers who were threatening layoffs or reduced hours in order to report a workforce of fewer than 50 people.
Workers will still be allowed to buy their own health insurance on a state exchange; the only thing that changes is that their employers won't be penalized next year if they do.
The Treasury Department said the administration will publish proposed rules implementing the provisions sometime this summer, "after a dialogue with stakeholders - including those responsible employers that already provide their full-time work force with coverage far exceeding the minimum employer shared responsibility requirements."
"Once these rules have been issued, the administration will work with employers, insurers, and other reporting entities to strongly encourage them to voluntarily implement this information reporting in 2014, in preparation for the full application of the provisions in 2015," the statement said. "Real-world testing of reporting systems in 2014 will contribute to a smoother transition to full implementation in 2015."
President Obama's senior adviser Valerie Jarrett wrote in a blog post that the move shows the White House is "listening" to make sure they "get this right." On the other side, though, Senate Minority Leader Mitch McConnell, R-Ky., said it's a sign of the administration "slowly admitting what Americans already know."
"Obamacare costs too much and it isn't working the way the administration promised," he said in a statement. "What I hear consistently in my travels around Kentucky regarding the regulatory burden on employers, the fact remains that Obamacare needs to be repealed and replaced with common-sense reforms that actually lower costs for Americans."