State Efforts to Tweak Obamacare Bad News for C-store Chains

For convenience store executives – especially those in the human resources realm – the three years since President Barack Obama signed the Affordable Care Act (ACA) have been a long road of interpretation, hope for repeal and implementation.

We now have a good grasp on what the law does and we’re coming to grips with the fact that repeal is not going to happen while the Democrats still control either the House, Senate or Presidency. But just as companies are making the necessary adjustments to implement major provisions of the law, particularly the employer benefit mandate, the Obama Administration has delayed that provision and – possibly more troubling – states are starting to tweak their own laws in order block moves being made by companies to alter the full-time/part-time mix of their workforces.

Since the passage of the ACA, a great deal of media attention – and increasingly, political attention – has focused on the 30-hour threshold of the law that requires employers to provide coverage for workers, which many health care reform and labor activists believe incentivizes employers to reduce employee hours.

During their 2013 legislative sessions, both California and Connecticut considered bills that would have forced qualifying employers with employees on state Medicaid programs to pay for their benefits through a tax or fee – pejoratively, their “fair share” – mitigating the cost shift to the states and theoretically eliminating the incentive to reduce hours. Both bills failed to advance after intense lobbying by the business community, but are likely to return in 2014.

The California bill applied to employers with at least 500 workers in the state, while the Connecticut bill applied to employers with at least 100 workers in the state and 250 workers overall. Unfortunately, the all-too-common misconception among policymakers that total revenue is interchangeable with profit is already playing out in this debate.

The first iteration of “fair share” bills took place in the mid-2000s and was all about Walmart. This time, the world’s largest retailer is not alone, with the entire non-union service industry – c-stores, restaurants, grocers and lodging – facing public scrutiny for how they plan to implement Obamacare internally.

In a change of tactic, the reemerging “fair share” policy battle is being fought less overtly by unions than by union front groups and activist organizations. And rather than the previous talking points of low employee wages and damage to mom-and-pop businesses, today’s anti-corporate activists are weaving a narrative of racism and misogyny to justify their policy goals.

As July turns to August, just a few state legislatures have yet to complete their work for the year. Come January, though, Democrat-dominated state governments such as Colorado, Delaware, Maryland, Minnesota, Oregon, Vermont, Washington and West Virginia will have a hard time resisting the urge to soak companies with large workforces for more dollars.

The president and his allies in health care reform won a huge victory in March 2010, but even they admit the bill was rushed and the final product not complete. Changes in the composition of the U.S. Senate during the course of the health care reform debate prevented the typical tweaking of legislation during the conference committee process. It now appears that provisions that Democrats may have wanted to add to the final version three years ago are surfacing in state legislatures.

Many c-store operators may have already started to adjust their full-time/part-time mix to prepare for Obamacare’s mandate. With these latest developments, you would be wise to begin an internal discussion about the effect new “fair share” laws may have on those plans and other ways to mitigate the burden that health care reform will put on c-store operations.

Joe Kefauver is managing partner of Parquet Public Affairs, a national issue management, communications, government relations and reputation assurance firm that specializes in service sector industries. Parquet's clients include Fortune 500 corporations, trade associations, regional businesses and non-profit organizations. For more information, go to www.ParquetPA.com.

Editor's note: The opinions expressed in this column are the author's and do not necessarily reflect the views of Convenience Store News.