The National Retail Federation is asking Congress and the Obama Administration to consider a delay of up to one year in implementing employer requirements under the Affordable Care Act.
Under a delay, enrollment via health insurance exchanges for government-paid benefit programs or individual coverage not aided by an employer would not be hindered.
“Our nation--particularly employers--cannot afford for the ACA to stumble out of the starting gate,” Neil Trautwein, vice president and employee benefits policy counsel at the federation, testified before the U.S. House Energy & Commerce Committee’s subcommittee on oversight and investigation on June 26. “We fear that as time diminishes between now and January 2014, a cascade of additional last minute regulations will create added confusion and thus could encourage more employers to back out of coverage.”
A delay in employer requirements, presently kicking in for 2014 starting with open enrollment in October 2013, would “facilitate a smoother transition and less disruption of existing coverage,” he testified. “Alternatively, you might consider a soft roll out with emphasis on compliance assistance rather than regulatory adherence and penalty enforcement. Any relief--particularly relief that supports employer-based coverage--will be welcome.”
The big challenge is that the reform law defines full-time employment at 30 hours per week to qualify for coverage instead of the traditional 40 hours. But weekly hours can vary in retail and employees could wind up being eligible for coverage during one quarter of a year, but not the next. Further, some employees--and some of the most productive--value part-time status Trautwein said.
“Retail and chain restaurants will be forced to fine tune the balance between full and part-time, focusing on employee status on a real-time basis,” he testified. “This is time, effort and money spent on compliance rather than retail or chain restaurant sales. For variable hour employees who do not meet the new full-time standard, this will mean less income in their pockets and consequently less likelihood of obtaining coverage on their own.”
In an interview with Health Data Management, Trautwein said the federation is working with the administration to find an accommodation so employees don’t have to be enrolled and disenrolled “as hours wax and wane.” The federation is looking for a structure under which employees’ weekly work hours can be averaged over time, such as each quarter or annually. So, if they meet the 30-hour-per-week requirement over a quarter or year, they would be eligible for coverage during the next quarter or year, with the measuring of eligibility starting in 2013 for coverage in 2014.
Trautwein warned, however, that with open enrollment for 2014 looming in October 2013, not all regulations effecting health insurance exchanges and employers are in place. These include rules on sharing information on employees, and eligibility, reporting, taxation and penalty provisions from the Internal Revenue Service and Treasury Department. Employers will be pressed to comply with the rules in time absent a delay in the effective dates or a delay on enforcement.
The federation is not calling for changes that would directly affect health insurance exchanges, Trautwein said. “We’re not looking for the exchanges to fail, we hope they will succeed.” At the present time, however, “it may be that exchanges in some states may need more time before opening their doors.”
Asked what the chances are of federal officials realizing that provisions of the Affordable Care Act to expand insurance coverage won’t be ready by October, Trautwein said it is a “fair assumption” that the nation could see a soft rollout, such as a delay in opening exchanges or enforcing the rules.
Trautwein’s congressional testimony is available here.
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