Obamacare Stands; What’s Next for Retailers?

After second Supreme Court victory, the battle lines shift for c-stores

Robert Lillegard, Freelance writer

Supreme Court rules on Obamacare challenge

WASHINGTON -- Obamacare stands. The Supreme Court’s recent ruling in the King v. Burwell litigation removes one of the last roadblocks to enforcement of the law and means that come 2016, all larger employers will need to offer insurance coverage.

The central issue in that ruling, which was the largest challenge to the Affordable Care Act since 2012, was whether federal subsidies would be offered to individuals purchasing insurance on the federally run exchanges many states are using. If the court had ruled that only state-established exchanges qualified, several larger convenience-store chains would have been able to dodge the employer mandate since it’s only enforced when a non-covered worker actually purchases insurance through an exchange. The court’s ruling closes that loophole and keeps subsidies available at all the exchanges.

Little Surprise

Neil Trautwein, the vice president of healthcare policy for the National Retail Federation, said the decision didn’t surprise him.

“It kind of matched our experience in the events leading up to the passage of the ACA,” Trautwein told CSP Daily News. “The court reached past the drafting error and saved the whole.”

With the delays coming to an end and two Supreme Court challenges in the rearview mirror, lobbyists are shifting their focus from overturning the law to reducing its impact.

Future Focus

NACS external counsel Scott Sinder, who is a partner and chair of the Government Affairs and Public Policy Group at law firm Steptoe & Johnson, said he sees four areas of focus.

  • First, there are the reporting requirements. Sinder calls the current law “fairly onerous.” That’s because the law requires tracking everyone who is covered rather than only verifying possible violations. 

“Basically under existing law there is a retrospective process where you have to identify every employee, every covered dependent, have to get the social security number for those dependents,” Trautwein said. “It’s a very burdensome tracking method.”

Representatives Mike Thompson (D-California) and Diane Black (R-Tennessee) introduced legislation to simplify the process and similar legislation is expected in the Senate.

  • The second battleground is the 30-hour-a-week rule. Efforts to raise the definition of full time from 30 hours (as it is under the Affordable Care Act) to 40 hours (as it has been traditionally) continue.

“For an industry that’s as dominated by part-time workers and hourly workers as the c-store industry, I think that’s a critical issue,” Sinder told CSP Daily News.

  • Under the Affordable Care Act, employers cannot discriminate in the plans they offer. The third battleground is whether this will be determined by availability of a higher-level plan (whether any worker can choose to buy it) or actual usage of the plan (whether they in fact do so). If a company offers a higher-level but more-expensive plan and a lower-level, less-expensive plan, and the actual usage test applies, a company could be found guilty of discrimination if very few hourly workers sign up.
  • The final question is the 2018 “Cadillac tax,” an excise tax on any group of benefits exceeding certain thresholds. While this is unlikely to apply to hourly line workers, lobbyists are hoping to minimize it as it could add costs for c-store executives electing higher-level health plans.

Future legal challenges are certain, but both Sinder and Trautwein said Obamacare is likely to stick around for a long time. Therefore, c-stores should focus on making the law easier to deal with rather than dreaming of it being overturned.

“They have ruled, and they have ruled with definitiveness,” Sinder said. “So now we move on.”