WASHINGTON, September 24, 2009 – The National Retail Federation today asked the Senate Finance Committee to reject an amendment to its health care reform bill that would replace the measure’s conditional “free rider” employer mandate with the full-scale pay-or-play employer mandate approved this summer by the Senate Health, Education, Labor and Pensions Committee.
“We strongly favor health care reform but disagree with the idea that an employer mandate to provide coverage is necessary to achieve universal coverage or that it would lower coverage costs,” NRF Vice President and Employee Benefits Policy Counsel Neil Trautwein said. “The ‘free-rider’ mandate under consideration by the Finance Committee may be the least onerous of the mandate proposals currently under consideration in Congress, but it would still impose significant additional costs on employers. The mandate passed by the HELP Committee is far worse and will become steadily more expensive over time. We strongly urge the Finance Committee to reject the Kerry-Bingaman amendment.”
The Finance Committee this week is considering the America’s Healthy Future Act, introduced last week by Chairman Max Baucus, D-Mont. The bill stops short of mandating that employers provide health coverage for workers. But if employers fail to offer insurance meeting certain standards for coverage and affordability, workers could join an insurance “exchange” and potentially be eligible for federal subsidies to help them purchase insurance. Once that happens, the employer would be required to pay a penalty of up to $400 for each full-time worker employed even if only some were receiving subsidies.
Under an amendment offered by Finance Committee members Senators John Kerry, D-Mass., and Jeff Bingaman, D-N.M., that requirement would be replaced by the employer mandate included in health care reform legislation approved this summer by the Senate Health, Education, Labor and Pensions Committee. Under the HELP bill, employers would be required to offer health insurance to their workers and pay at least 60 percent of the cost of premiums. Those who don’t would be required to pay a penalty of $750 for each full-time worker and $375 for each part-time worker.
In addition to being a more clear-cut mandate and carrying a higher per-employee penalty than the Finance Committee version, NRF is concerned that the $750 penalty under the HELP bill would be increased in the future if the measure becomes law.
NRF has opposed employer mandates throughout this year’s debate on health care reform because mandates drive up labor expenses while doing nothing to address underlying costs. With the economy making it difficult for retailers to raise consumer prices to cover the additional expense, merchants could be forced to reduce the size of payrolls through attrition or layoffs in order to meet a mandate.
The National Retail Federation is the world's largest retail trade association, with membership that comprises all retail formats and channels of distribution including department, specialty, discount, catalog, Internet, independent stores, chain restaurants, drug stores and grocery stores as well as the industry's key trading partners of retail goods and services. NRF represents an industry with more than 1.6 million U.S. retail establishments, more than 24 million employees - about one in five American workers - and 2008 sales of $4.6 trillion. As the industry umbrella group, NRF also represents more than 100 state, national and international retail associations. www.nrf.com.