To Your Health?
Our CSP Daily News Poll was unambiguous. On the heels of Congress’ historic passage of national health-care reform, we asked our readers: “Do you think the new health-care legislation will be positive or negative for your business?”
Not surprisingly, 80% of the 275 respondents answered negative. The other 20% were divided between positive and neutral.
For sure, I doubt any of us truly believes that health-care costs are going to fall as a result of the Democraticpushed legislation. Nor can anyone with a Libertarian outlook be comfortable with employer mandates or penalties against adults opting to carry no coverage.
The reform is flawed. Is it entirely bad? Will it destroy our nation’s system of capitalism or wipe out small businesses? The evidence strongly suggests it will not. Indeed, while it takes little effort to find the weaknesses and uncertainties in the Obama plan, its harshest critics speak as if today’s health-care situation is utopian.
It isn’t. In addition to the tens of millions who lack insurance, problems persist even for those who pay into plans, and for the countless companies that struggle to pay for their plans. Premiums for employer-based health insurance have more than doubled over the past decade. For many small businesses, insurance has spiked by 25% to 35% over just the past two years.
While it remains uncertain, the legislation proposes not only to protect patients with pre-existing conditions, but also prevent insurance discrimination against businesses with employees who become seriously ill. The law also provides a tax credit for which an estimated 3.6 million small businesses nationwide could qualify. And additional components in the legislation are likely to prevent dramatic, seemingly arbitrary annual swings in premium cost. This is the good news.
Now, the bad news: If you do not currently offer health coverage to parttime employees, the law’s provision will treat every two part-timers as one fulltimer. So if you have 200 part-time workers, for health-insurance purposes they will equal 100 full-time workers— and that’s 100 “new” members you’ll have to account for. With that, here are some early conclusions about who could be our industry’s winners and losers in this debate.
Single-store and small-chain operators currently offering health coverage. Not only could your premiums fall or stay flat, but the tax credit will be a nice bonus. And even if you’re not offering benefits, many independent analysts say the tax credits are enough to give you a win.
Operators with 10 to 20 stores and who have been providing at least some health coverage. You could benefit from predicted stability in premiums.
Potentially the entire c-store channel, which loses many good workers to jobs that offer health coverage. Universal coverage could help reduce turnover.
Mid-sized to large operators that do not currently offer health insurance at all could be looking at six- or seven-digit cost increases for mandated coverage.
Likewise, those operators that provide for only full-time workers but not part-time employees could face a steep increase. This is a major issue because 51% of retailers surveyed in the CSP Daily News Poll fall in this category.
To Be Determined
So what if you’re a business with 500 employees and currently offer various plans to all of your employees? The jury is out. After checking with federal lawmakers and think tanks, I have not found any consensus. Indeed, while Deere, the world’s largest maker of farm machinery, said the new law would increase its expenses by $150 million this fiscal year, GE—another veritable global giant—said it did not anticipate any significant increase as a result.