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Delay of health-care mandate a big relief for businesses

Businesses are reacting with mixtures of jubilation and relief to the Obama administration’s decision to give large and midsize employers until 2015 to provide health care coverage for their workers or face fines.

Before the administration’s announcement Tuesday, businesses with 50 or more employees had to provide affordable coverage to their full-time employees starting Jan. 1 or risk a series of penalties if even one worker ended up getting government-subsidized insurance.

“This is a wise decision,” says Bill Kramer, executive director for national health policy for the Pacific Business Group on Health. It represents national employers in all 50 states, including GE and Wal-Mart.

Kramer says the administration listened to the “legitimate concerns” of employers in its delay decision.

The vast majority of large employers will continue to provide health insurance benefits for employees — and wouldn’t be subject to penalties — Kramer says.

But the reporting requirements for those companies will be an extra administrative burden. The hope is that those requirements will be simplified before they take hold and will allow time for employers to adapt their systems, Kramer says.

He doesn’t expect the delay to alter the decision of other companies who are not currently providing insurance coverage.

The decision to delay “is a recognition of how complex the implementation is,” says Allan Zaremberg, CEO of the California Chamber of Commerce. He says many of the regulations regarding implementation of the act didn’t start rolling out until late last year and not everybody — even those who already offer insurance coverage to employees — would be ready to implement it.

There’s still also confusion over implementation, especially around the calculation of part-time vs. full-time employees, he says.

Many of the companies who’d be hit by the penalties can’t afford to offer the insurance coverage, Zaremberg says. More than 90 percent of the California Chamber’s member companies do offer coverage.

Erik Stewart, who advises small-business owners at the Washington Small Business Development Center in Aberdeen, Wash., says most of the clients he helps have “too little or incorrect information” about the federal act.

“The small-business community, in general, typically isn’t aware of what the actual law entails,” says Stewart. Small-business owners are “so busy running their business day to day that they have not thought about the details of how the legislation affects them,” he says.

Stewart says many small-business owners, such as a local dry cleaner with 17 employees, were panicking about impending penalties they thought they faced for not offering health benefits. He said that owners of very small businesses are relieved when he notifies them that companies with fewer than 50 employees are exempt. “What they hear on TV usually isn’t the whole story, and so what has happened is that there is a culture of fear concerning these laws,” says Stewart.



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