Last updated on September 5th, 2012 at 04:10 pm
[dropcap]M[/dropcap]arch 23 will mark the one-year anniversary of the enactment of the Patient Protection and Affordable Care Act (PPACA), often referred to as “Obamacare.” In January 2011 the House of Representatives successfully passed H.R. 2 (245-189), which would repeal PPACA. However, the legislation is largely symbolic and has no chance for consideration in the Senate. The House and Senate, respectively, are considering a number of bills that make changes to PPACA, including repeal of the 1099 reporting mandate and elimination of the W-2 reporting requirement. Both of these proposals have attracted bi-partisan support.
While politicians in Washington continue to debate the merits of the law, American businesses are struggling to understand the direct impact of PPACA on their business. So many details of the law were left to interpretation by the Secretaries of the Department of Health and Human Services or Department of Labor that many businesses are left with plenty of questions and few answers.
In late 2010, N.G.A. formed a task force to identify ways to mitigate the impact, identify legislative and regulatory reforms to PPACA and educate members on the implementation of the law. Also, in December 2010, N.G.A. retained the resources of Epstein, Becker and Green’s healthcare counsel to provide advice and guidance to N.G.A. and its members on PPACA and other healthcare issues. Over the past few months N.G.A. members have helped to identify a number of issue areas from within PPACA to address:
Part-Timers: PPACA defines a part-time worker as someone working 30 hours or fewer per week. This definition of a part-timer will require employers to cover employees once considered part-time and to significantly increase healthcare costs for employers to a level that is not sustainable. N.G.A. is working at both legislative and regulatory solutions to lessen the impact on the supermarket industry, which relies heavily on part-time employees and will be disproportionately impacted by the requirement.
Grandfathering: Plans in existence on March 23, 2010, are allowed some exemptions from PPACA requirements, but also face restrictions on changes that can be made to those plans. Employers will quickly exhaust their flexibility to make plan changes under the current grandfathering rules. N.G.A. supports modifications to provide more flexible standards for employers to make plan changes without risking the loss of their grandfathered status.
Wyden Choice: This provision of PPACA provides that if any employee’s cost of coverage is between 8 percent and 9.8 percent of household income, and the employee’s household income is less than 400 percent of the federal poverty level, the employer must offer that employee a “free choice” voucher to be used to purchase coverage through a state-based exchange. The voucher amount is equal to the cost of the most generous option in the employer’s plan. The amount is either for self-only or family coverage, depending on the employee’s election. Significantly, if the employee is able to find cheaper coverage on the exchange, he/she is entitled to the difference between the voucher amount and the cost of coverage purchased. The Wyden Choice provision would provide many young, usually healthy, workers with an unfair incentive to leave the employer coverage. If this category of employees leaves an employer’s coverage, the insurance “pool” will be comprised of older, sicker individuals who could not find cheaper coverage through the exchange. N.G.A. will work to repeal this provision, which was added later on during the healthcare debate.
As you are well aware, the impact of PPACA on your business over the next few years will be significant. Doing nothing is simply not an option. N.G.A. is moving forward to find solutions that lessen the impact on businesses and, importantly, on the independent retailer and wholesaler. We hope employers will join N.G.A.’s efforts to reform this law and encourage legislation that actually reduces the cost of healthcare.