The mandate requires companies with at least 50 or more full-time employees to provide healthcare coverage or face penalties up to $3000 per worker. Large employer groups have welcomed the delay, while others are concerned it will leave too many Americans without insurance.
"This looks very bad," said Jeff Young, health care reporter at The Huffington Post. "The administration was only about three months away from when the health insurance exchanges were supposed to open."
The health insurance exchanges are "marketplaces" in the states for individuals and small businesses who need to purchase a policy that is right for them.
The White House has said the health insurance marketplace will open on schedule on October 1.
"There has been some doubt about whether those would be ready on time," Young said. "There's been delays of a few other less significant provisions and now this comes along."
According to the most recent census data, more than half of the U.S. population has insurance through their employer and a survey by the Henry J. Kaiser Family Foundation shows that 94 percent of employers with more than 50 employees offer healthcare coverage.
"During this 2014 transition period, we strongly encourage employers to maintain or expand health coverage," Mark Mazur, the assistant secretary for tax policy at the Treasury Department, said in a statement .
Few employers are expected to capitalize and drop existing coverage during the extra year without enforcement of the law.
"The Congressional Budget Office and other people projecting the effects of the healthcare law didn't expect in the short term lots of employers to start signing up workers who are not currently covered because of these rules," Young said.
The largest consequences may in fact be political, as Republicans have already jumped on the delays as a sign that Obamacare is a nonstarter.
"This announcement means even the Obama administration knows the 'train wreck' will only get worse," House Speaker John Boehner said in a statement. "This is a clear acknowledgment that the law is unworkable, and it underscores the need to repeal the law and replace it with effective, patient-centered reforms."
The administration is thought to have pushed back the employer penalties as an acknowledgment of the clerical burden the changes will have on companies.
"Let's not foreclose the possibility that this really is a one-year delay because the computer systems at the government level maybe weren't ready and because companies weren't really sure what was demanded of them," Young said.
Recently returned from a tour of Africa, President Obama has not made public statements about the change to his signature domestic bill.