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Public Policy

Will health care law cause employers to drop coverage?

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To provide care, or not to provide care? That is one of many questions facing employers as provisions of the new federal health care law take effect.

A new survey of Fortune 100 companies conducted by the House Ways and Means Committee found businesses could save more than $28 billion a year if they eliminated employer-based health care coverage and put their employees into the taxpayer-subsidized government “exchanges” that will be created under the law. That’s even after paying $2,000 per-employee annual penalties for not providing health care coverage.

NRF Vice President Neil Trautwein went on Fox News Channel Monday to discuss the survey and provide the retail industry’s perspective.

The $2,000 penalty comes as part of the law’s “employer mandate,” which requires most businesses to provide health care coverage to full-time workers at government-mandated levels or pay a fine. The mandate is intended to encourage more companies to provide coverage. But with the fine lower than the cost of providing insurance, it could have the unintended consequence of encouraging companies to drop coverage, Trautwein said.

“In a pure dollars and cents standpoint, it could not be more clear – you save a lot of money, hundreds of millions of dollars for some of these companies, by no longer providing coverage,” Trautwein said.

NRF has supported legislation in Congress to repeal the employer mandate, and is working with the Obama Administration to ease the impact on employers of some other provisions of the law.

During the health care debate, NRF supported efforts to make health care more affordable but argued that the proper way to do so was by making it more affordable, not through government mandates.