Exclusive: Obamacare—The 'Employer of Choice' Dilemma
Retailers use mandate delays to consider best plans for employees
Published in CSP Daily News
VALPARAISO, Ind. & SANTA CLARA, Calif. -- The differing levels of delays tied to the Affordable Care Act (ACA), sometimes referred to as "Obamacare" by both sides of the political aisle, may be postponing the inevitable dawn of universal coverage here in the United States, but for retailers looking for clear answers, those appear few and far between.
In its April cover story, CSP magazine reviews current delays to the enforcement of the 2010 law and explores its impact on retailers. While researching the matter, editors spoke to several retailers, among them, two leading operators who have traditionally prioritized health care and insurance for their workers.
For employers like Gus Olympidis and Tom Robinson, the go-to strategy has always been "above market" plans, designed to build a reputation of being "an employer of choice."
But for Olympidis, president and CEO of the 60-store Family Express chain, Valparaiso, Ind., creating a balance between what’s good for the employee and what’s good for the company is getting more and more difficult.
"Here's the strategic dilemma," Olympidis told CSP Daily News. "Do you differentiate yourself by providing a high level of benefits or do you not? We're looking for quality people, so [a strong healthcare package] is the price of admission."
"We already provide health insurance for our hourly employees," said Robinson, president Robinson Oil Corp., Santa Clara, Calif. "What's going to happen to us is that our benefits will be broader and more expensive."
The complication Robinson points out is that he now has to offer the same plan to all employees, and since their original, two-tiered coverage differed for salaried and hourly workers, he will have to offer the "lesser" plan to all employees and somehow compensate those under the more expensive coverage, possibly giving them a raise to make up the cost differential.
Both Olympidis and Robinson point out that talk of increasing the minimum wage exacerbates the problem for retailers. "You have to add the inflationary impact of upward pressure on the minimum wage," Olympidis said. "Add to it the potential changes in the overtime exemption and it's becoming a monumental issue. There are lots of zeros attached to that provision."
Going forward, Olympidis plans to "stay the course," choosing to make final decisions as the enforcement deadlines draw near.
- For employers with 100 or more employees, the law now says the percentage of full-time workers that employers need to offer coverage to goes from 70% in 2015 to 95% in 2016.
- Employers with 50 to 99 workers now have until 2016 before any employer responsibility payments could apply.
- Those with 50 or fewer workers are exempt.
With timeframes in flux, retailers are assessing their options. "We are riding the calendar," Olympidis said. "No decisions have been made at this point. We don't know."