"This is a common-sense clarification of the law," said Joanne Peters, a Health and Human Services spokeswoman, Fox News reports.

The administration also downplayed the change, saying the it is expected to affect fewer than 500,000 people.

Democrats have praised the announcement, but Republicans say it's one more example of a healthcare program that is unworkable.

"We asked Secretary Sebelius point blank what would be the next holiday surprise, and she was silent. Yet, here we are with another major policy shift," said Tennessee GOP Rep. Marsha Blackburn, chairman of the House Energy and Commerce Committee, Fox reports. "The sad reality is that when the law takes effect come Jan. 1, more Americans will be without coverage under Obamacare than one year ago."

"Less than two weeks from going live, the White House seems to be in full panic mode. Rather than more White House delays, waivers, and exemptions, the administration should provide all Americans relief from its failed law," she added.

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