After unsuccessful efforts in Congress to repeal the Affordable Care Act, the focus has returned to making the controversial health care law more manageable for employers. Reforms NRF are pursuing include full repeal of the employer mandate that requires large companies to provide health coverage to full-time workers at government-dictated levels, restoration of the 40-hour workweek for benefit eligibility, repeal of the Health Insurance Tax provision, and changes to the byzantine ACA reporting rules.
In the most recent development, the House voted in July to repeal the ACA's 40 percent "Cadillac Tax" on high-value health plans, and the repeal is expected to be approved by the Senate. While aimed at "gold-plated" plans, NRF argued that the provision was projected to hit mainstream plans because of the way it was indexed. The tax was originally scheduled to take effect in 2018, but had been delayed until 2022 and has never taken effect.
Separately from ACA repeal, President Trump signed an executive order in 2017 that would allow small businesses to buy insurance for their workers through new federally sanctioned association health plans that would operate across state lines for the first time. AHPs allow small employers to band together through trade or professional associations to purchase coverage at more affordable rates normally available only to large companies. They are already allowed at the state level in some states but cannot currently operate across state lines. NRF has strongly supported AHPs, saying expansion of the plans would help small businesses compete with larger companies in providing employees with health insurance at affordable rates. NRF called AHP regulations released by the Labor Department in 2018 “an important step toward expanding affordable health care options for small businesses and lowering costs for their employees.”
Why it matters for 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
Since its passage in 2010, the ACA has posed a number of challenges for employers and NRF has worked with Congress to minimize the burdens imposed by the measure. NRF’s priorities have included measures to streamline and simplify reporting requirements, end the Cadillac Tax and other tax provisions, and define “full-time” as 40 hours a week rather than 30.
With insurance premiums skyrocketing for years, NRF has a long history of seeking health insurance reform that would lower the cost of medical care and coverage. Instead, the ACA has emphasized 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 don’t count as full-time.
Repeal was Trump’s top priority after taking office, and passed the House in 2017. But the effort stalled in the Senate, largely because conservative Republicans insisted on a more complete repeal than was possible under special procedures that were used in an attempt to avoid a Democratic filibuster. NRF called the approach “realistic legislation” that would have achieved “real reform” even if it did not achieve full repeal. Afterward, NRF said repeal remains the ultimate goal but that “there are many ways to reduce the burdens of this flawed law for the benefit of employers and workers alike.”
Over the years, NRF has found a number of ways to ease implementation of the law and help retailers with their compliance burden. NRF helped win 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 than the large-group market and additional mandates. 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 Cadillac Tax on high-value health plans was delayed to 2022 before the later vote to repeal the measure, the 2.3 percent medical device tax was suspended for two years until this year, and the law’s per-subscriber Health Insurance Tax on insurance companies was delayed from taking effect in 2016 to 2017 instead.