The owners of the Shanty Grille restaurant in Ellicott City breathed a sigh of relief when the Obama administration delayed for a year penalties on businesses that do not provide health insurance to employees.
For months, they fretted about how they were going to cover more workers as required by the Affordable Care Act. The family-owned restaurant with about 85 workers now offers insurance to 11 employees but would have to cover about 30 more when the act is fully implemented in January, said Eric King, Shanty Grille's vice president.
The restaurant pays about $4,700 a year in premiums for each employee with insurance, but brokers have said it would cost nearly twice as much under President Barack Obama's health initiative.
"I think the decision [to delay penalties] at least in the short term is fantastic," said King, whose father owns the restaurant. "I just don't see how we would have been able to swallow the additional costs."
Complaints by companies much like Shanty Grille prompted the Treasury Department to announce late Tuesday that it would give companies with more than 50 full-time workers more time to understand the law's requirements.
"We have heard concerns about the complexity of the requirements and the need for more time to implement them effectively," wrote Mark J. Mazur, the assistant treasury secretary for tax policy, in a post on the department's website.
Mazur wrote that the federal government would look at ways to simplify the reporting requirements companies must meet.
Small businesses are not required to provide health insurance coverage under the Affordable Care Act. The requirement was placed on larger companies in an effort to prevent businesses from dropping coverage, forcing their employees to buy individual insurance.
The administration's decision to delay penalties will have little impact on efforts to implement the changes in Maryland, where about 750,000 people are uninsured, said Carolyn Quattrocki, executive director of the Governor's Office of Health Care Reform.
The employer mandate is not as central to the law as other provisions. Most medium-size and large companies offer health insurance. Ninety-eight percent of employers with more than 200 employees offer insurance and 94 percent of employers with 50 to 199 workers offer coverage, according to an annual survey by the nonprofit Kaiser Family Foundation and the Health Research & Educational Trust.
"It won't affect our readiness," Quattrocki said. "We remain focused, and it won't effect our efforts in terms of our state responsibility."
An analysis last year by the Hilltop Institute at the University of Maryland, Baltimore County found that delaying the employer mandate would affect about 10,000 people in Maryland. About 5,000 would enroll as individuals through the state insurance exchange established under the law, while the other half would remain uninsured.
Individuals still are required to buy insurance by Jan. 1 or face a $95 penalty. They can buy it from an exchange beginning in October if their employer does not offer coverage. Federal health subsidies will ease the cost. The poor will access coverage through an expansion of Medicaid.
Republicans and critics of the Obama health initiative say the decision to delay the employer mandate shows that people do not support the law and that it is too expensive.
Ellen Valentino of the National Federation of Independent Business called the delay "a new opportunity for revision to an extremely costly and complex law."
But Carrie H. Colla, assistant professor of the Dartmouth Institute for Health Policy and Clinical Practice in New Hampshire, suggested that the delay could foster support for the law by giving people more time to learn about it. Once people understand it, they might be more willing to accept it, she said.
Colla has published several studies of a similar mandate enacted in San Francisco in 2008 which found that fears about the law subsided once it was implemented.
"Once they have a better understanding of what they need to know, they might be more comfortable with it," she said.
Under the law, employers who are required to provide coverage but fail to do so would be fined $2,000 per employee beyond the first 30 employees.
The Restaurant Association of Maryland recently held an information session for its members and found that even the experts had different interpretations about certain aspects of the law.
"We are very happy about the delay," said Melvin Thompson, a senior vice president with the association. "Our members still have difficulty understanding the complexities of the requirement. The big issue is, they are trying to grasp and understand the law so they can comply with it."
Walt Clocker, owner of Angel's Food Market Inc. in Pasadena, said he is waiting until all of the regulations associated with the law are finalized before he tries to understand it. He employs fewer than 50 people at his independent grocery but said he has heard from many business owners concerned about the law. Cost is a big concern, he said.
"Everything is so tight now, and nobody has any wiggle room on the expense side," he said. "Anything that adds cost, whether it be a small tax, a new mandate, is a concern."
At Shanty Grille, King said he still has concerns about increased premiums even with the delay.
"Businesses need to able to make a profit," he said, "which means businesses will have to pass costs on to customers."