Obamacare implementation delay no boon for hiring
Wed Jul 3, 2013 6:46pm EDT
By Lisa Baertlein
(Reuters) - The Obama administration's decision to delay a key provision of the healthcare law, by giving employers an extra year to offer insurance coverage, is not expected to significantly impact 2014 hiring since many big businees were prepared for the change.
Smaller businesses, which have been among the most vocal critics of the law, say they are still coming to terms with the system's cost and complexity and need the extra time simply to make Obamacare work.
"It's a good thing they delayed it," said Doug Prestwood. "There's just not enough information. It's just a big chaos."
The Patient Protection and Affordable Care Act, dubbed "Obamacare", was passed in 2010 and upheld by the U.S. Supreme Court a year ago. The administration announced Tuesday that employers have an extra year to provide workers health insurance.
"I don't think this means that people are going to hire with reckless abandon now," said David Lewis, chief executive of OperationsInc, a Connecticut-based human resources outsourcing and consulting firm that serves small to mid-sized companies. "It's a can that's just been kicked down the road."
Administration officials have said the change affects less than 5 percent of businesses, as an overwhelming majority of employers already provide health coverage. But that could still involve as many as 10,000 businesses and hundreds of thousands of workers, according to reform advocates.
Many large employers already were on track to make the change to their benefits in time for the previous 2014 deadline, said Steve Wojcik, vice president of public policy at the National Business Group on Health in Washington, D.C.
"If you're a large employer, your plans are well under way," Wojcik said.
Many companies which offer healthcare benefits began planning changes in anticipation of the law months ago, because workers usually enroll in plans in the fall.
Companies that plan to hire said it was due to increased demand and not because the law was delayed.
"It will not change anything for us," said Bob Mayer, vice president for human resources at Weis Builders, which is based in Minneapolis and has about 150 employees. "Our staffing plans are based completely on what we anticipate our growth in the marketplace to be, and not on a federal law that requires us to provide insurance."
Jessica Aptman, spokesperson for ZocDoc, a doctor search website, said the company provides "100 percent of healthcare coverage for employees and their families, and we have no plans to stop hiring. In fact, we're hiring aggressively."
The pause, however, will give businesses time to figure out how to operate under the new law, whose significant reporting requirements affect even companies with large numbers of workers ineligible for coverage, said Michelle Neblett, the National Restaurant Association's health care policy expert.
"It will help reduce some of the anxiety and fear of the unknown out there," Neblett said.
Sears Holdings Corp "is already taking the necessary steps to assess and ensure compliance" with the law and does not expect the delay to impact hiring, said Howard Riefs, a spokesman for the company.
Wal-Mart Stores Inc, the largest nongovernment U.S. employer, said it is still evaluating the impact, if any, this would have, but small companies like Kerns Trucking Inc in Kings Mountain, North Carolina, are relieved to have another year. The company, which does not offer health insurance to its almost 70 workers, is trying to decide whether to do so or pay the penalty.
"It's starting to come out now what some of the true costs are. They're extremely high," said Doug Prestwood, vice president of Kerns. "In our business, you have a plan before you implement something, but it's like they voted this thing in and now they're trying to write it."
Many businesses, including restaurants and retailers, had complained that healthcare reform would burden them with red tape and additional expenses that would hamper hiring.
But many retail and restaurant workers already aren't eligible because they work fewer than the 30-hour a week threshold.
Last year, Olive Garden parent Darden Restaurants Inc, in a brief trial, hired more part-time workers to reduce health benefit costs. It quickly abandoned the effort after a consumer backlash. Papa John's International Inc suffered a similar fate when its chief executive said he would make a similar move.
Questions around eligibility played a significant role in the delay, said Neil Trautwein, vice president and employee benefits policy counsel for the National Retail Federation.
"They figured out that employers weren't ready, that the administration wasn't ready and the individual state marketplaces were not ready," Trautwein said.
(Corrects third-last paragraph to say Darden "hired more part-time workers" instead "making some workers part-time")
(Reporting by Lisa Baertlein in Los Angeles, Jessica Wohl in Chicago, and Atossa Abrahamian, Madeline Will and Martinne Geller in New York; Editing by Richard Chang)