Senior White House adviser Valerie Jarrett cast the decision as part of an effort to simplify data reporting requirements.
She said since enforcing the coverage mandate is dependent on businesses reporting about their workers' access to insurance, the administration decided to postpone the reporting requirement, and with it, the mandate to provide coverage.
"We have and will continue to make changes as needed," Jarrett wrote in a White House blog post. "In our ongoing discussions with businesses we have heard that you need the time to get this right. We are listening."
Republicans called it a validation of their belief that the law is unworkable and should be repealed.
"Obamacare costs too much and it isn't working the way the administration promised," said Senate Republican leader Mitch McConnell of Kentucky. "The White House seems to slowly be admitting what Americans already know ... that Obamacare needs to be repealed and replaced with common-sense reforms that actually lower costs for Americans."
Adam Jentleson, a spokesman for Senate Majority Leader Harry, Reid, D-Nev., said in an email, "Both the administration and Senate Democrats have shown — and continue to show — a willingness to be flexible and work with all interested parties to make sure that implementation of the Affordable Care Act is as beneficial as possible to all involved. It is better to do this right than fast."