Business leaders laud delay of penalty
Business leaders expressed relief on Wednesday that the Obama administration won't penalize companies with 50 or more employees for not offering health insurance next year.
“The reaction is: ‘At least we can breathe right now,' ” said James McTiernan, a health care consultant with Triad Gallagher, a Downtown benefits advising firm.
McTiernan said clients in retail and hospitality industries — employers with large part-time workforces that expected to be most affected by penalties — began calling him upon hearing the announcement on Tuesday.
The important component of the Patient Protection and Affordable Care Act, President Obama's signature health care reform, is delayed until 2015. Companies would have incurred penalties starting on Jan. 1 if they did not offer affordable health insurance to workers.
The delay does not change the individual mandate, which requires all Americans without insurance from an employer to buy it themselves starting Jan. 1.
Businesses with 49 or fewer workers continue to be exempt from the mandate and fines.
“Ninety-six percent of businesses in this country have fewer than 50 employees,” said Terry Gardiner, vice president of policy and strategy for advocacy group Small Business Majority. “Only the 4 percent of larger employers that do not offer health insurance will be impacted by the delay in the penalty.”
Most companies that offer health coverage are expected to continue the practice, said Tom Tomczyk, a health care consultant with Buck Consultants, Downtown.
“Most larger employers were offering coverage that was affordable,” he said. But companies with many part-time workers, such as restaurants, hotels and retail chains, that did not give employees insurance had expected to take a major financial hit.
Now it appears the law will absorb a significant cost, Tomczyk said. The penalties were expected to generate $10 billion to fund implementation of the law in 2014, according to a Congressional Budget Office estimate.
“They're going be losing $10 billion, if the CBO is correct,” he said. “That's going to have to have be made up somewhere.”
Business groups had complained since the law passed in 2010 that the provision was too complicated. For example, it redefined full-time workers as those who put in 30 hours or more in a week. It included two requirements, one to provide coverage and another that it be deemed “affordable” under the law. Violations of either exposed employers to fines.
“It's a step in the right direction because they need to shelve this whole thing and start over,” said Deb Doucette, secretary-treasurer of Pittsburgh restaurant company PIPA Group.
The company, which owns the Clark Bar and Grill in the North Side, Caffe Amante in Downtown, and Bistecca Steakhouse and Wine Bar at The Meadows Racetrack & Casino, is just under the 50-employee threshold. But Doucette remains concerned that any changes in employment could push the company over the threshold and expose it to a raft of costs.
Companies that planned to offer health coverage said the delay is helpful.
Christine Whipple, executive director of Pittsburgh Business Group on Health, said many large companies her organization represents were unsure what reporting was expected in order to show compliance with the mandate.
“A big unknown is the internal costs to companies for complying,” Whipple said. “Hopefully, this one-year delay will provide the time employers need to assess their internal systems and make the adaptations needed to comply with the regulations.”
Senior White House adviser Valerie Jarrett cast the delay as an effort to clarify and simplify reporting requirements.
“We have and will continue to make changes as needed,” Jarrett wrote in a White House blog post. “In our ongoing discussions with businesses we have heard that you need the time to get this right. We are listening.”
The Associated Press contributed. Alex Nixon is a Trib Total Media staff writer. Reach him at 412-320-7928 or firstname.lastname@example.org.
Add Alex Nixon to your Google+ circles.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Stocks end tumultuous week on down note
- Kraft shareholders approve merger with Heinz
- U.S. employers add 223K jobs, jobless rate falls to 5.3%
- Gulf states reach $18.7B settlement with BP over oil spill
- H-D Advanced Manufacturing in Franklin Park buys aerospace components maker Firstmark
- Government contests sale of GE appliance business to competitor Electrolux
- Halliburton to close Indiana County office
- Alpha Natural Resources buys out European partner in Marcellus venture
- Millionth ’Vette was destined for history
- Bank of New York Mellon seeks to intervene in N.J. casino saga as power plant taps collateral
- Heinz executives to dominate post-merger management of Kraft Heinz Co.