Key Retail Concerns - Senate Health Care Reform

• Employer Mandate
• Employer Flexibility
• Lower Health Care Costs
• Public Plan Option
• Revenue Provisions

• Employer mandates increase labor costs and crowd out other forms of compensation. For retail, an employer mandate in the present economy will mean lower wages, fewer hires and fewer employees.


• The Senate health reform bill (H.R. 3590, the Patient Protection and Affordable Care Act) will require employers with more than 50 employees to either provide care or pay a $750 penalty if one full-time worker is eligible for subsidized coverage.


• If an employer provides coverage and a worker is eligible to opt out of the employer plan and receive a subsidy, the employer is liable for a $3,000 penalty for each subsidy-eligible employee up to a maximum cap of $750 for each full-time employee.


• NRF opposes any form of employer mandate including “free-rider” mandates. These are all hostile to employers – especially the retail and restaurant industries. Employer mandates of any kind amount to a tax on jobs – a dangerous anti-employment step to take in the middle of a deep recession. There can be no acceptable way to mandate employer-provided coverage.

Employer Flexibility

• Retailers have one of the most difficult workforces to cover of any. We are often open seven days a week and sometimes 24 hours a day. We have full, part-time, temporary and seasonal workers. Retailers also experience high turnover rates. We badly need greater flexibility to manage our diverse workforce.


• The Senate health care bill will make it more difficult for us to manage our workforce. It arbitrarily defines a full-time employee as working an average workweek of 30 hours. It also mandates a maximum waiting period for coverage of 90 days but penalizes employers for waiting periods beyond 30 days. Waiting periods from 30 to 60 days generate a penalty of $400 per affected worker. Waiting periods between 60 and 90 days generate a penalty of $600 per affected worker.


• NRF urges greater flexibility to manage our workforce. Defining a full-time employee as working 390 hours or more in a calendar quarter will better accommodate variation in workweeks. Allowing for a maximum waiting period of 90 days without penalty will help us manage turnover as well as coverage costs.

Lower Health Care Costs

• In the eyes of retailers, the biggest problem in health care today is the cost of care and coverage. We fail to get good value for the dollars we invest in coverage. Lowering health care costs should be the biggest priority of health care reform.


• The Senate reform bill takes some positive steps in some respects to lower future care and coverage costs, but these steps are largely too timid to make a difference. Other provisions – particularly the employer mandate, the public plan option and too generous health benefits – will increase costs for retailers. The cost curve for public programs may bend, but often costs saved there find their way back to private payers through cost-shifting.


• We urge the Senate to go back to the drawing board to refocus attention on lowering health care and coverage costs. If we lower the cost of health care, it will be a much easier job to increase coverage for all Americans.

Public Plan Option 

• A new, publicly-sponsored insurance plan or co-op to compete with private insurance plans within the new purchasing group (known as the Exchange or Gateway). The intent is to offer a low-cost insurance alternative to existing private plans.


• President Obama and his congressional allies have set the public plan option as a leading goal, in part to deflect criticism from single-payer health care advocates and also to capitalize on public dislike for health insurance companies.


• NRF opposes any form of public plan option, primarily to avoid creating additional shifting of costs to private coverage due to inadequate public plan reimbursement (comparable to cost-shifting from Medicare and Medicaid). NRF also opposes a public plan option because of its potential to undercut private insurance alternatives and squeeze out the private insurance market – thus creating a de facto single-payer system.

Revenue Provisions 

• Health care reform is an expensive proposition – CBO projects the cost to the federal government of this bill to be $894 billion over ten years. Private sector costs – not included in CBO’s estimate – could run much higher. A smaller bill will require less revenue to fund – we urge Congress to think in more fiscally responsible terms.


• Even at time when there are no good revenue options, the choices made by the Reid bill are troubling. Great store is placed in the surcharge on high dollar health care plans, but this proposal – particularly as indexed to CPI instead of medical inflation – will both reduce benefits as well as ensnare increasing numbers of taxpayers as seen with the AMT.


• Health industry taxes applied against the insurance, pharmaceutical and medical device industries are certain to be passed on to private payers – employers and employees alike. We cannot afford the cost of a health care bill that spends much and saves little.