Retailers Applaud Delay in Obamacare Employer Mandate

WASHINGTON, D.C. -- Most major retailer trade associations have applauded the U.S. Treasury Department’s decision to provide an additional year before the mandatory employer and insurer reporting requirements of the Affordable Care Act (ACA) begin.

The National Retail Federation (NRF), Retail Industry Leaders Association (RILA), and Food Marketing Institute (FMI) were among the retailer groups that released statements commending the Obama administration for delaying the employer reporting and penalty obligations under the ACA.

The administration’s decision to postpone until January 2015 a requirement that employers provide health care coverage for their workers or pay penalties appears to have both practical and political reasons behind it.

Some analysts suggest that Democrats fear backlash in the 2014 midterm elections from businesses and workers faced with penalties from the new law, according to at least one published report. On the other hand, an estimated half of all employers impacted were not ready to fulfill the law’s complicated reporting requirements anyway, according to Forbes.

The Affordable Care Act, signed into law by President Obama three years ago, required employers with more than 50 full-time workers to provide health benefits or face a $2,000 per-employee penalty beyond the first 30 employees.

A mandate that individuals buy health insurance or face a penalty is still on schedule for January and effects many more people.

One employee benefits consultancy told Forbes that according to its recent research, more than half of large and mid-sized companies said that complying with government regulations such as health care reform was one of the most significant challenges they face.

Despite efforts by the Obama administration to ease their concerns, employers still had a lot of questions, particularly around the reporting requirements for 2014, according to the report.

“We commend the administration’s wise move to delay the employer reporting and penalty obligations under the Affordable Care Act,” said NRF Vice President and Employee Benefits Policy Counsel Neil Trautwein. “This one-year delay will provide employers and businesses more time to update their health care coverage without threat of arbitrary punishment.”

RILA and FMI echoed the NRF’s comments and likewise pledged to continue to educate their members and work with the administration and Congress to protect retailers’ interests as the health care law is implemented.

"Today's announcement is very welcome news to all employers who continue to offer quality healthcare and to the employees that benefit from it. Employer-sponsored coverage is the backbone of health coverage in the U.S, which is why for more than a year, retailers have warned that the lack of time to comply with ACA requirements could jeopardize coverage for millions of Americans,” said RILA Vice President Christine Pollack.

RILA, its member companies, and its Employers for Flexibility in Health Care Coalition have been extremely vocal in expressing concern to the Obama Administration about the lack of time for employers to comply with the ACA requirements.

“We appreciate their [the administration’s] willingness to listen and now to address our concerns that the employer community needs more time and more clarity before the new ACA requirements and mandates fully go into effect,” said FMI Senior Vice President of Government and Public Affairs Jennifer Hatchero. “There wasn’t enough time for employers with fluctuating workforces to adequately review all of ACA’s employer rules, modify their plans, build compliance systems and develop reporting mechanisms to be fully in compliance by Jan. 1.”

“We’re pleased that the Administration recognized the unique challenges facing the food retail community and our dynamic workforce, and offered 2014 as a transitional year. In the meantime, we will encourage our members to test the systems through voluntary reporting in 2014,” concluded Hatchero.

Some convenience store retailers already made efforts to respond to impending ACA requirements. According to several media reports, Royal Farms cut back hours of some employees to meet ACA guidelines. A full-time employee is considered one who works 30 hours a week or more.

Conversely, as CSNews Online reported, The Cumberland Gulf Group took the opposite approach, stating it would provide health care benefits to 1,500 more employees as of Oct. 1.