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Health Care Reform

Health Care Reform

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The NRF Retail Opportunity Index encourages Congress to support workforce investment by supporting jobs and economic growth rather than union organizers and expensive new regulations and mandates. Learn more.

The Issue

Half a dozen years since its passage in 2010, compliance with the Affordable Care Act continues to pose a number of challenges for employers, and NRF is working closely with Congress to minimize the burdens imposed by the still-controversial law. Current priorities include support of measures to streamline and simplify reporting requirements, end the “Cadillac Tax” on high-value plans, define “full-time” as 40 hours a week rather than 30, repeal a provision that keeps small employers from providing financial support for anything less than full coverage, and clarify treatment of seasonal employees. NRF opposes efforts to limit the exclusion of health care benefits from income tax.

With insurance premiums still skyrocketing, these current efforts are part of NRF’s long history of seeking reform that would lower the cost of medical care and coverage. Instead, the ACA emphasizes mandates that drive up expenses for employers. Since the beginning of 2015, the law’s “employer mandate” has required that businesses with 100 or more workers provide insurance to full-time employees at coverage levels determined by the government, and the requirement has applied to businesses with 50 or more employees since the beginning of 2016. The costs of the mandates are so high some retailers have been forced to stay under the 50-employee threshold to avoid being covered; others have cut workers’ hours so they won’t count as full-time.

Why It Matters to Retailers

While retailers have experienced the same added payroll costs as other industries, compliance is particularly complicated because of the nature of retail’s workforce. Retailers employ not just permanent, full-time workers, but also a large number of part-time, seasonal and temporary workers, and work hours can change rapidly according to demand. Certain provisions of the law, such as its 30-hour definition of full-time, are problematic under those conditions. As an industry with extremely tight profit margins, retailers are unable to absorb the added costs, and could be forced to lay off workers.

NRF Advocates for True Health Care Reform

NRF has long been committed to helping find a solution. While some elements supported by NRF can be seen in the Affordable Care Act, NRF opposed passage because of the law’s failure to adequately address health care costs and its job-killing employer mandate. NRF has worked to repeal the most onerous provisions of the health care law, such as the employer mandate, but those efforts are a work in progress. In the meantime, NRF leads a number of coalitions on health care reform and is focusing on efforts to ease implementation and help retailers with their ongoing compliance burden. Among other measures, NRF supports legislation that would define full-time as 40 hours rather than 30, and a bill that would have the law apply to businesses with 100 or more employees rather than 50.

A number of welcome reforms to the law were seen in 2015, beginning with repeal of a requirement that would have pushed companies with between 50 and 100 workers into the small-group health insurance market, which carries higher premiums and additional mandates than the large-group market. Also repealed was a requirement for large employers to automatically enroll workers in health care plans whether they wanted coverage or not. The effective date of the 40 percent “Cadillac Tax” on high-value health plans was delayed two years to 2020, the 2.3 percent medical device tax was suspended for two years until 2018, and the law’s per-subscriber Health Insurance Tax on insurance companies was delayed one year until 2017.

The reforms came after a June 2015 U.S. Supreme Court ruling that upheld the Affordable Care Act for the second time and NRF said Congress should “seize the opportunity and address the most egregious errors in this poorly constructed law.”

NRF Health Reform Priorities

Health Care Income Tax Exclusion

NRF Position: Oppose proposals to cap the income tax exclusion for employer-provided health benefits.

Background: Health benefits provided by employers are not taxed like wages.  Instead, they are excluded from a worker’s total income. House Republicans have proposed capping the unlimited exclusion in an effort to reduce overall health care spending. NRF opposes capping the exclusion because it would undermine the source of coverage for 175 million Americans.

ACA Reporting Fix

NRF Position: NRF supports the Commonsense Reporting Act (H.R. 2712/S. 1996), bipartisan legislation to streamline and simplify reporting requirements under the Affordable Care Act.

Background: The ACA requires reporting of information about employer-provided coverage in order to administer the individual and employer mandates. The current system looks backward (much like a tax return) and requires the matching of coverage and Social Security numbers for individual employees and dependents. In addition, employees will face massive tax bills to refund health credits mistakenly obtained through ACA exchanges. The Commonsense Reporting Act shifts to a prospective system, simplifying reporting and helping prevent mistaken access to credits.

End the ‘Cadillac’ Tax

NRF Position: NRF supports bipartisan legislation to permanently repeal the ACA tax on high-value health benefit plans (H.R. 879, the Ax the Tax on Middle Class Americans’ Health Plans Act; H.R. 2050/S. 2045, the Middle Class Health Benefits Tax Repeal Act).

Background: The ACA sought to discourage excessively generous health plans by creating a surcharge on the excess value of health care, wellness and health savings account benefits over an indexed limit. The Cadillac Tax defines health benefits too broadly and indexes the value in such a way that mainstream plans will quickly be subject to the surcharge tax. The Cadillac Tax is currently in a two-year delay, but NRF supports its complete repeal.

Restore the 40-hour Workweek

NRF Position: NRF supports bipartisan legislation to repeal the ACA’s definition of “full time” for benefit eligibility at 30 hours per week (H.R. 30, the Save American Workers Act; S. 30, the Forty Hours is Full-Time Act).

Background: The ACA defines full-time work for health coverage eligibility at 30 hours per week, thus encouraging more use of part-time employees. Defining full-time as the standard 40-hour workweek would add to employee paychecks and encourage more full-time work. The House passed H.R. 30 in January 2015.

Small Business Health Reimbursement Account Relief

NRF Position: NRF supports the Small Business Health Care Relief Act, bipartisan legislation to repeal the ACA’s penalties for small employers who offer support for health coverage through health reimbursement accounts (H.R. 5447/S. 3060).

Background: The ACA does not require employers with fewer than 50 full-time employees to provide coverage. But it prohibits these employers from providing financial support for anything less than full coverage. Penalties are severe, amounting to $100 per employee per day. H.R. 5447 has passed the House and is expected to pass the Senate and be signed into law later this year.

Seasonal Employees Technical Fix

NRF Position: NRF supports the STARS Act (Simplifying Technical Aspects Regarding Seasonality), bipartisan legislation to clarify treatment of seasonal employees for purposes of the ACA employer mandate (H.R. 863/S. 1809).

Background: The ACA has two incompatible definitions affecting treatment of seasonal employees for the purpose of determining whether the employer is subject to the employer mandate. The STARS Act clarifies that a seasonal employee who works less than six months in a year and performs work commonly associated with certain seasons or periods of the year will not be counted toward the 50-employee threshold for the employer mandate.

Additional Resources

  • The infamous portal to the Federal Fallback Marketplace (exchange). Online marketplace for individuals and businesses with 50 or fewer employees.


Affordable Health Benefits Coalition – NRF-chaired coalition of allied business interests focused on the cost of medical care and health insurance coverage.

Employers for Flexibility in Health Care Coalition

Coalition letter to the IRS on ACA employer reporting mandates  

Washington Council Ernst & Young’s reference deck on ACA employer requirements

The Affordable Coverage Project – Coalition working to repeal the ACA health insurance tax

Diverse viewpoints

Alliance for Health Reform’s Employer Mandate of the Patient Protection Affordable Care Act Toolkit 

The Galen Institute 

The Brookings Institute