Making sense of “mandate” madness
For months, the debate over healthcare has almost exclusively focused on the individual-mandate, as we waited on the Supreme Court to determine the fate of the law. As a result many complex and crucial pieces of the Affordable Care Act (ACA), such as the employer-mandate, have received comparatively little attention. Given the enormous implications of changes to employer-sponsored coverage and the 170 million Americans who currently rely on it for coverage, it is time that more attention is paid to the issue.
President Obama has repeatedly assured Americans that if they liked their health insurance, they could keep it. Now, however, with 2014 inching closer and closer and no meaningful implementation guidelines available for employers, those assurances are in doubt.
Employer-sponsored healthcare is the crown-jewel of the U.S. healthcare system. For more than 60 years, most Americans, and millions of retail employees, have relied on health coverage sponsored by their employer, yet this could all soon change and no one seems to be paying much attention.
With less than a year and a half before the law takes effect, hundreds of regulations have yet to be revealed by the Obama Administration. Included among the delayed regulations are critical rules and definitions that will determine whether employers can continue to provide their employees with affordable healthcare coverage. For example:
• Definition of a full time employee: ACA requires employers to provide coverage to full-time employees, but a year and a half before the law takes effect, retailers don't know how a full-time employee will be defined.
• Affordability Test: Under the ACA, an employee’s share of monthly premiums cannot exceed 9.5% of household income. This has raised countless questions about how a retailer could know the income of a household. While the administration has offered some unofficial comments, no formal details have been provided to guide employers preparing for 2014.
• Minimum Value Test: The ACA requires a retailers plan to cover 60% of the total allowed costs of benefits. There are no proposed regulations yet offering any kind of guidance on how employers are expected to comply with this requirement.
• Tax penalties: ACA imposes a tax penalty on employer plans that fail to meet the affordability and minimum value tests. However, no details have been issued on how these tests will work and how retailers should prepare for compliance.
• Reporting Requirements: ACA requires an enormous amount of data reporting, yet details on what data will be reported, to whom, and how remain unknown.
The task of complying with the new laws would be enormous if employers had years to adapt, but with less than a year and half, the task is Herculean. Retailers are committed to continuing to provide health coverage to employees and their families. However, much remains unknown about how retailers will comply with the law. One thing is for sure; the longer the Administration delays, the higher the risk will be. The task of complying may prove too great for employers, and employees who receive health coverage through their employer may lose the coverage they like.
Sandy Kennedy is president of the Retail Industry Leaders Association, an organization that represents the world’s largest and most innovative retail companies. RILA members include more than 200 retailers, product manufacturers, and service suppliers, which together account for more than $1.5 trillion in annual sales, millions of American jobs and more than 100,000 stores, manufacturing facilities and distribution centers domestically and abroad.