Health Care Questions

Convenience, retail sector now must assess effect of newly passed legislation

Published in CSP Daily News

WASHINGTON -- As a growing number of state attorneys general file suits over constitutionality and Republicans in the Senate introduce legislation to repeal the health care legislation that President Obama signed yesterday, convenience store owners and executives are beginning to try to understand how this controversial, far-reaching bill will affect their companies and the industry.

"There's no question in my mind that we needed reform, but did we need such comprehensive reform in one bill?" Peter Krueger, state executive of the Nevada Petroleum Marketers & Convenience [image-nocss] Store Association, asked in The Las Vegas Review-Journal, giving voice to one side of the argument. "That scares business, because we don't know what the price tag is."

And on the other side of the spectrum, Yolanda Kabala might now be able to swing health insurance for all her workers, which in turn, she thinks, could help her hold onto the good ones at her 7-Eleven store in Oak Forest, Ill., reported The SouthTown Star. And Kabala will be able to keep coverage for herself, despite a brain injury she suffered during a fall two years ago. With the passage of the health care reform bill, Kabala, 53, hopes to extend the coverage she buys for herself and a store manager to all her employees.

A CSP Daily News Poll yesterday asked, "Do you think the new health care legislation will be positive or negative for your business?" The results (representing 261 respondents by press time): Positive, 8.4%; Neutral, 10.7%; Negative, 80.8%.

In a statement, the National Retail Federation (NRF), meanwhile, expressed "extreme disappointment" at the passage of sweeping health care reform legislation, saying added labor costs under the bill will cost many retail workers their jobs. "This truly is an historic moment, but not a cause for celebration. Congress has embarked on a dangerous, anti-job experiment in the midst of the worst economy our nation has seen in decades," NRF senior vice president for government relations Steve Pfister said. "How many lost jobs will it take before Congress reverses course?"

"Our nation simply cannot afford more job losses during this economy, and many businesses already struggling to keep their doors open may not be able to withstand this added financial burden," Pfister said. "Retailers have told Congress all along that we value our employees and want to expand upon the millions of workers and their families for whom we already provide coverage, but that to do that we need reform that would lower costs. Instead, we've been handed employer mandates that do just the opposite while doing little or nothing about the cost of medical care, which in turn drives higher coverage costs."

"We are particularly concerned about midsized companies that are large enough for the mandates to apply but too small to have the ability to absorb these added costs," Pfister said. "They could be among the hardest hit. And small businesses that drive so much of the job creation in our country are going to be forced to hold their size under 50 workers to avoid the employer mandate threshold."

"Passage of this legislation is not the end of the process," Pfister said. "As regulators set the rules under which the new law will be implemented, NRF will work diligently to maximize the benefits of its positive components and minimize the negative impact on American businesses and workers. We will work to repeal provisions like the employer mandate that will harm both our industry and the economy. Our goal is still health care reform that helps the retail industry voluntarily provide high quality coverage to employees in a more affordable and cost-effective manner. This legislation fails to meet that goal."

The House on Sunday night voted 219 to 212 to send H.R. 3590, the Patient Protection & Affordable Care Actthe health care bill passed by the Senate on Christmas Eveto President Obama for his signature. Later, the House voted 220 to 211 to approve H.R. 4872, the Health Care & Education Affordability Reconciliation Act of 2010, a package of amendments to the Senate bill. That measure now goes to the Senate, where it is expected to be considered this week.

The Senate bill imposes a penalty of $750 per full-time worker on companies with 50 or more employees that do not provide coverage to full-time workers. But the House reconciliation bill would increase that penalty to $2,000, with the first 30 workers exempted. If an employer offers coverage but the coverage is deemed unaffordable to a full-time employee, that employee can opt out to a new purchasing exchange. The company would then be assessed $3,000 for each of those employees up to a cap of $2,000 for every full-time worker on the payroll. This mandate becomes applicable in 2014.

In a followup statement, the NRF urged the Senate to reject a package of health care reform amendments passed by the House, saying the measure would make legislation signed by President Obama even more costly to employers and further threaten retail jobs.

"The 111th Congress' health care reform debate has been disappointing to say the least," Pfister said. "Retailers came to this debate with high hopes for lower health care and coverage costs. The legislation that emerged was punitive in its penalty mandates and insufficient in its approach to health reform and the cost of medical care."

President Obama signed the Patient Protection & Affordable Care Act on Tuesday. Pfister said amendments to that bill that would be made under the Health Care & Education Affordability Reconciliation Act of 2010 would exacerbate NRF's concerns about the lack of greater and more immediate savings for employer-sponsored health care coverage, penalties for employers who fail to provide health insurance coverage to full-time workers and higher taxes that would be passed on to both employers and consumers.

"H.R. 4872 greatly increases employer penalties, a dangerous move in our view given that we found the Senate-passed mandate penalties unacceptable. H.R. 4872 also counts part-time employees in coverage threshold calculationsan approach that could ensnare small to midsized retailers," Pfister said. "The problems in this bill far outweigh any positive measures contained within."

With the new law and proposed amendments requiring employers to either provide health care coverage to full-time workers or pay hefty penalties for failing to do so, it is "an economic certainty" that retailers operating under razor-thin profit margins will be forced to reduce the size of their workforces or slow expansion plans, Pfister said.

"This is an outright tax on jobs, a dangerous strategy when our economy so clearly needs to grow through job creation," Pfister said. "Health care reform in its current form will become the biggest anti-stimulus legislation imaginable."

The Senate bill imposes a penalty of $750 per full-time worker on companies with 50 or more employees that do not provide coverage to full-time workers. But the House reconciliation bill would increase that penalty to $2,000, with the first 30 workers exempted. If an employer offers coverage but the coverage is deemed unaffordable to a full-time employee, that employee can opt out to a new purchasing exchange. The company would then be assessed $3,000 for each of those employees up to a cap of $2,000 for every full-time worker on the payroll. The mandate becomes applicable in 2014.

Also, under the House bill, the 50-worker threshold would be calculated based on full-time equivalents, meaning part-time workers would be counted even though they would not be required to be offered insurance. The Senate bill counts only full-time workers.

Click here to view the White House webpage on the new health care legislation.

Keywords: 
health care