The Obama administration's surprise decision to delay penalties for some employers who don't offer health insurance led to a new debate Wednesday over whether plans to expand access to health insurance for individuals were now in danger.
Supporters of the 2010 Affordable Care Act characterized the delay as a hiccup and said new health-insurance exchanges for individuals will likely go ahead as planned. But other observers said that by declining to enforce the rules on employers, the Obama administration might find it harder to carry out the individual mandate under which people must carry health insurance or pay a tax penalty.
The Treasury Department announced Tuesday that companies with the equivalent of 50 or more full-time employees wouldn't face fines starting at $2,000 per worker for failing to provide health benefits in 2014. Instead, penalties would only take effect in 2015, after officials simplify rules about the way in which employers demonstrate they are providing coverage.
Some analysts played down the change on the grounds that most large employers already offer coverage to workers voluntarily. "It is much ado about very little," said Gerard Anderson, a professor at Johns Hopkins University. "So many people in firms larger than 50 already had health coverage."
Treasury officials said all other provisions of the health law scheduled to take effect in 2014 would go ahead. Those include the individual mandate to carry coverage and federal tax subsidies for lower-income people to buy coverage on new insurance exchanges if they aren't covered through their employer.
The Congressional Budget Office has said an additional 14 million people were projected to get coverage in 2014 because of the law, seven million of them through the exchanges set to open in October, but that the number of people who get coverage through an employer would remain flat that year.
Supporters of the law said people whose employers delayed offering coverage in 2014 might be better off using the exchanges.
"It definitely increases the number of people who will be getting coverage on the exchanges, because they won't be getting coverage from their employer," said Jay Angoff, a partner at the law firm Mehri & Skalet and a former Health and Human Services Department official working on implementation of the health law. "I've got a lot more faith in the government providing these people good coverage than in the businesses that don't want to cover them at all."
But questions were raised Wednesday about how the new exchanges would operate in the absence of information from employers about whether they were offering coverage.
To get subsidized coverage on exchanges, people are supposed to show they can't get employer-backed coverage. But without information from employers on their health-insurance offerings—or lack thereof—it isn't clear how the Internal Revenue Service would determine an individual's eligibility.
"It is going to be very difficult to implement the exchange when you don't know," said Timothy Finnell, president of Group Benefits LLC, a Memphis health-care brokerage and consultancy.
A Treasury Department spokeswoman didn't immediately respond to requests for comment. The department said more detailed rules would be issued next week.
Joel Ario, a managing director at Manatt Health Solutions who previously oversaw the federal office working to set up the health law's insurance exchanges, said the subsidies for individuals should be available next year even without information from employers.
"Was a complete database of employer plans essential to verifying eligibility? I think the answer to that is no," he said. "It was basically going to be built on attestation."
There is another problem for the IRS: If it doesn't know what employers are doing, it may not know whether people are telling the truth when they say they have coverage on the job. That in turn would make it harder to enforce the individual mandate, under which those with no coverage must pay a tax penalty.
Christopher Condeluci, a former Senate Finance Committee aide and employee-benefits lawyer at the firm Venable, said the reason for requiring insurers and employers to send coverage information was "to enforce the individual mandate."
Insurers were already worried that the penalty for not carrying coverage was relatively weak, especially in 2014, when the penalty starts at $95 or 1% of income, whichever is higher.
—Scott Thurm contributed to this article. 
