Retailers Dismayed By Obamacare Ruling

The health care reform includes employer mandate regulations slated go into effect in 2014

The Obama Administration scored a big victory when the U.S. Supreme Court ruled by a 5-4 vote that the Affordable Care Act (ACA) — also known as Obamacare — is constitutional. But for convenience store operators and retailers overall, the outcome was a major loss.

While a lot of focus has been on the individual mandate portion of the health care reform, the retail community is concerned with the act's employer mandate and what effect it will have on employer-sponsored health care coverage. The ACA lays out regulations slated to go into effect in 2014.

Under the reform, states will be responsible for establishing exchanges that will create a marketplace for the purchase of health care insurance. Individuals will be required to have health care coverage or pay a penalty. All businesses with more than 50 full-time-equivalent workers (30 hours or more) will be required to offer coverage or pay a $2,000-per-person penalty for the first 30 employees. Insurance will be available to employees following a waiting period of 90 days. The mandate also includes new reporting requirements for businesses with more than 50 employees.

Various media reports have indicated that a significant percentage of employers will eliminate employee health plans after 2014 because the $2,000-per-worker penalty would be less expensive than what most companies pay for the average health insurance plan.

Retail organizations expressed widespread dismay with the Supreme Court's June 28 ruling.

"[This] ruling is bad news for our members," said NACS Chairman Tom Robinson. "We are well aware that the country's health care system is broken and requires a serious overhaul. We will continue to support common-sense reform to make the system more efficient and eliminate waste and fraud, but [this] decision is a step in the wrong direction."

National Retail Federation (NRF) President and CEO Matthew Shay echoed this sentiment. "As the voice of retailers of all types and sizes, we're disappointed by [the] ruling," he said. "The Court missed an opportunity to redress the many shortcomings of the law. As it stands, the law wrongly focuses more on penalizing employers and the private sector than reducing health costs…This law will have a dramatic, negative impact on every employer and employee in the United States and further constrain job creation and economic growth."

To protect its convenience store members, NACS announced that it convened a small group of members from the NACS Board of Directors to serve on a health care task force that will review legal counsel's analysis of the Supreme Court's decision.

As of press time, White House officials had agreed to meet with members of the retail industry to discuss issues associated with implementation of the Affordable Care Act.

Republican Presidential nominee Mitt Romney has already gone on record to say that if elected in November, the ACA would be first on his list to overturn.

Hispanics visit convenience stores nearly two times more per month than non-Hispanics — 7.3 times vs. 5.7 times. Bilingual and Spanish language-dominant Hispanics visit c-stores the most.

Source: The NPD Group