CQ: Business Push-Back on Employer Mandate Heightens as 2014 Nears

CQ HEALTHBEAT NEWS
March 11, 2013 – 4:57 p.m.

Business Push-Back on Employer Mandate Heightens as 2014 Nears

By Jane Norman, CQ HealthBeat Associate Editor

A North Carolina owner of Five Guys burger restaurant franchises has held off on expanding to more locations until he can better understand the costs of the employer mandate in the health care law, he said at a Heritage Foundation forum on Monday.

Franchiser Mike Ruffer also said he will have to consider capping some of his employees’ schedules at 30 hours a week so he won’t have to offer them health insurance under the overhaul law (PL 111-148, PL 111-152). “These have to be rational considerations anyone in my situation has to consider,” said Ruffer.

Further complicating the situation is that he does not yet know what he might be charged for health insurance if he chooses to buy it because insurers have not yet begun disclosing their premium prices for policies to be sold beginning in October for the 2014 benefit year, Ruffer said. Pricing likely won’t be available until July, he said. “I don’t know how to model the economics,” he said.

The forum came as Republicans in Congress and outside opponents of the law ramp up their strong objections to particular sections of the overhaul that will kick in soon, such as the employer mandate. Under the law, businesses with 50 or more full-time employees or full-time equivalents must offer health insurance to workers. A full-time employee is considered someone who works at least 120 hours a month, or roughly 30 hours a week.

Sen. Orrin G. Hatch, R-Utah, introduced a measure (S 399) earlier this month that would repeal the requirement, though that bill is unlikely to pass given that the Democratic authors of the law control the Senate and the White House. Similar legislation (HR 903) was introduced in the House by Republican Charles Boustany Jr. of Louisiana. Boustany also held a hearing last week in the Ways and Means health subcommittee featuring criticism of the employer requirement.

Supporters of the law say the mandate is needed to ensure broad access for workers to health insurance that all Americans will be required to have in 2014. In addition, certain small businesses will qualify for a small-business tax credit to help pay for insurance, and small businesses will have access to an exchange in which they can find more affordable coverage. Supporters also point out that offering health insurance coverage is not required for the very smallest companies, which make up the majority of U.S. businesses.

Ruffer said he has 147 employees on his $2.2 million payroll at eight restaurant locations, and 60 of them would qualify as full-time employees under the law’s complex calculations. If he does not offer them health insurance when the law goes into effect he will pay $60,000 a year in penalties, eliminating a great deal of his profits, he said. “Just take one of my restaurants and wipe out the profits — it’s gone,” he said.

Fast-food chain restaurant owners have not traditionally offered health insurance or taken it into their economic calculations, Ruffer said. “There’s part of me that would love to offer health insurance to my employees,” he said, but the costs are daunting.

He also said that under his agreements with Five Guys, he is expected to add three more restaurants soon, but he said he can’t make the commitment without knowing more about his future health care costs.

Robert Graboyes of the National Federation of Independent Business Foundation said at the Heritage forum that his group will continue to fight for repeal in Congress. Businesses don’t know yet what policies will cost and the details of the final regulations that will affect their costs, Graboyes said. He also cast doubt on whether the health insurance marketplaces that are to offer insurance in the states for individuals and small businesses will be up and running later this year. “My guess is no,” said Graboyes.

Leaders at the Department of Health and Human Services have consistently said that the state-run, state-federal partnership and federally run exchanges will be ready for enrollment in October.

Ruffer said he did not initially realize that the health care law would apply to his business, and he added that he believes few of his employees understand that they soon will be required to have insurance. “It’s nowhere on their radar screen,” he said.

Source: CQ Online News

Same-day coverage of the people and events shaping health care policy from Washington.

© 2013 CQ Roll Call All Rights Reserved.

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