Most of us assumed President Obama’s re-election in November 2012 was the final out in the game of repealing the Patient Protection and Affordable Care Act (PPACA). After all, achieving universal health care reform was the president’s domestic policy home run, and the Obama Administration was not about to allow major changes to PPACA in its final four years in office.
But, (in keeping with the early baseball theme here) as the great American philosopher Yogi Berra said, “It ain’t over ‘till it’s over.”
As 2014 approaches, many wonder if there could in fact be changes to the PPACA before the employer and individual mandates go into effect next year. To paraphrase former U.S. House Speaker Nancy Pelosi’s (D-CA) memorable line from March 2010, people are thinking: Now that the health care bill has passed and we’ve found out what’s in it, improvements to the law may be necessary.
Then, the Obama administration made the surprise July 2 announcement that it is delaying by one year three important PPACA requirements affecting employers:
- "Play or Pay" mandate – Employers with an average of 50 or more full-time workers must offer minimum-value health coverage to their employees working 30 hours or more per week, and to their children, or pay a penalty. This requirement was originally to be effective Jan. 1, 2014, but now the penalty will not be enforced prior to January 2015.
- Notifications to the IRS – The law mandates that health insurers and group health plans must notify the IRS of the organizations to which they are providing coverage. This originally applied to the 2014 calendar year, with reporting required in January 2015, but both dates have now been moved ahead one year.
- Notifications to full-time employees – PPACA requires covered employers to provide statements to their full-time employees detailing the information reported to the IRS about them. As with the notifications of health coverage, this requirement has been pushed out another year, to be applied to the 2015 calendar year, with reporting required in January 2016.
Employers and business groups were taken aback by announcement of the delays, but most hailed being given more time to make their health care coverage decisions. HR professionals may appreciate the extra time, too. In SHRM’s June 2013 survey “Health Care Reform—Challenges and Strategies,” they said the two biggest challenges with the PPACA are keeping up with regulations (25 percent) and understanding the details of the law (20 percent).
The administration’s announcement prompted the U.S. House to pass two bills on July 17 that would codify the delay of the employer’s “play or pay” mandate and postpone the individual mandate to purchase health insurance, as well. Despite its own announcement, the administration issued a veto threat on both bills. The administration remains committed to the individual mandate. Thus, it appears legislative efforts to delay or alter the employer or individual mandates are going nowhere in the Democratic-controlled Senate.
Or are they? Recently, labor unions have become major critics of the health care law. Laborers International Union of North America President Terry O’Sullivan wrote President Obama on July 18, saying the PPACA may have “destructive consequences” on his union’s members and their families.
That letter followed one earlier in the month from three major union heads to top congressional Democrats Sen. Harry Reid (D-NV) and Rep. Pelosi. It said the reform law will “destroy the foundation of the 40-hour work week” unless Congress changes the law’s definition of full-time worker, adding that the legislation “creates an incentive for employers to keep employees’ work hours below 30 hours a week… (and) fewer hours means less pay while also losing our current health benefits.”
The letter was signed by James Hoffa, head of the Teamsters; Joseph Hansen, leader of the United Food and Commercial Workers International Union, and Donald Taylor, president of UNITE-HERE – three major supporters of PPACA.
Organized labor provides a powerful catalyst to potentially changing PPACA’s precedent-creating definition of a full-time worker as anyone who works 30 hours or more each week. Under the law, employers are required to provide health insurance to all those employees.
Congress is displaying ripples of dissent to the 30-hour definition. Senators Joe Donnelly (D-IN) and Susan Collins (R-ME) have introduced the bipartisan “Forty Hours is Full Time Act.” The bill would change PPACA’s definition of full-time to 40 hours.
Why was the 30-hour requirement included in the law in the first place? Put plainly, to cover more workers. Congressional proponents of the definition argue that employers that try to avoid providing coverage to their workers are making short-sighted business decisions. Thus, the 30-hour requirement is just Congress helping employers do the right thing. Plus, those PPACA supporters believe the 30-hour provision levels the playing field between more munificent employers and their tight-fisted competitors.
But that argument misses the point that generous employers offer health care benefits in part because they are a recruiting and retention tool. They don’t want their competitive advantage taken away by overzealous lawmakers who are trying to “level” the benefits playing field.
As for the allegation that employers would cut hours to avoid coverage mandates, Ron Pollack, executive director of Families USA—an organization that strongly supports PPACA—testified at a U.S. House hearing on July 23 that the average workweek has actually increased since 2009. So employers may not be cutting back workers’ hours in the face of the health care law, after all.
Bottom line: Once PPACA’s mandates become effective, some employers will decide to preserve coverage, and others will choose instead to pay the penalty. But both camps will simply be making a business decision, not being either benevolent or cold-hearted.
Will there be other shoes to drop? It’s possible, since parts of PPACA have been repealed since the law’s March 2010 enactment. For instance, in 2011, Congress unanimously repealed the 1099 requirement that businesses must report to the IRS all transactions of $600 or more. Also eliminated was the long-term-care insurance program that would have been available to anyone.
One thing is certain: Supporters of PPACA will not allow changes to the law without a fight. They control most of the important administration and congressional posts needed in Washington to block new amendments.
But one aspect of the law has remained consistent: its unpopularity. According to the latest Rasmussen Reports telephone survey, 55 percent of U.S. voters view the PPACA unfavorably, while 39 percent view it favorably. Those results are unchanged from a Rasmussen survey in May. Any three-year -old law with such anemic favorability numbers will remain heavily scrutinized, especially as the most important year for the law—2014—approaches in just a few months.
Rep. Pelosi may have had it right with her assessment three years ago. Now that health reform has passed and Americans are discovering what’s in it, many employers—and even labor unions—are not wild about what they’re finding.
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