NRF Testifies on Health Care Reform, Asks Congress to Eliminate Employer Mandate Penalties

WASHINGTON--(BUSINESS WIRE)-- The National Retail Federation told a congressional committee today that employer penalties under last year’s controversial health care reform law should be repealed, saying some retailers are already slowing down hiring rather than increase their exposure when employer mandates and penalties take effect in 2014.

“As a labor-intensive industry, retailers are strong advocates of high quality and affordable health coverage,” NRF Vice President and Employee Benefits Policy Counsel Neil Trautwein said. “Unfortunately, rather than moving us forward, passage of PPACA has made providing coverage more difficult for today’s retailer.”

“The penalty mandate provisions are already affecting hiring decisions in advance of their effective date,” Trautwein said. “We have heard reports from across the retail community that the penalty mandates are affecting expansion, franchising and hiring decisions today. We respectfully urge Congress to reassess and repeal the penalty mandate to help encourage needed growth in jobs and our economy.”

Trautwein testified before the House Education and Workforce Committee during a hearing this morning on the impact of last year’s Patient Protection and Affordable Care Act on the economy, employers and the workforce. He urged that Congress replace PPACA with “what we needed to start with in the first place: more job-friendly health care reform that will concentrate first on reducing the cost of medical care.”

Beginning in 2014, PPACA will require companies with 50 or more full-time workers to provide full-time workers with health insurance at government-mandated levels or pay penalties if they fail to do so. Some small retailers have told NRF they are limiting growth to avoid hitting the 50-worker threshold, and larger companies have said they are slowing growth because of the higher costs that would come with either mandated coverage or penalties. While the formula is complicated, the penalties are based on a figure of $2,000 for each worker not covered. NRF maintains a Health Mandate Cost Calculator modeling tool at that allows different-sized companies to see their mandate exposure penalty. It will likely be cheaper for a company to pay the penalties rather than pay for insurance, discouraging them from offering coverage, Trautwein said.

Trautwein cited a number of cases studies of companies that would be impacted by PPACA, including examples where locations could be closed and jobs eliminated, full-time workers switched to part-time in order not to be covered by the law, and health benefits currently offered to both full and part-time employees being restricted to full-time workers. Rather than broadening the availability of health care, PPACA could “ultimately succeed in dismantling employer-based health coverage,” he said.

Trautwein asked that Congress repeal the employer mandate penalties, define a full-time worker as 40 hours a week averaged over four months rather than 30 hours per week as currently defined under PPACA, that the waiting period for insurance eligibility be extended to 120 days rather than 90, and that automatic enrollment be repealed or delayed to 120 days.

Trautwein also asked that Congress reject any efforts to waive the Employee Retirement Income Security Act in order to allowing state-level health care reform that might be offered as an alternative to PPACA. Trautwein called ERISA the “backbone” of employer-provided health insurance because it allows large employers to offer common coverage across state boundaries.

As the world's largest retail trade association and the voice of retail worldwide, NRF's global membership includes retailers of all sizes, formats and channels of distribution as well as chain restaurants and industry partners from the United States and more than 45 countries abroad. In the United States, NRF represents the breadth and diversity of an industry with more than 1.6 million American companies that employ nearly 25 million workers and generated 2010 sales of $2.4 trillion.


J. Craig Shearman, 202-626-8134
[email protected]

KEYWORDS:   United States  North America  District of Columbia

INDUSTRY KEYWORDS:   Health  Public Policy/Government  Healthcare Reform  Congressional News/Views  Public Policy  White House/Federal Government  Professional Services  Insurance  General Health