The mixed emotions that Oklahoma City small-business owner Chad Godwin had to Monday’s news of another delay in the new health insurance laws summarizes the responses of local observers.
When Godwin heard that the Obama administration was giving medium-sized companies, or those with 50 to 99 employees, an additional year — or until Jan. 1, 2016 — to provide health insurance, he was glad. The announcement means his company, Godwin Formworks Solutions, which builds storm shelters, parking garages and other concrete structures, has room to grow this year, he said.
“But then I felt sick to my stomach when I realized I could have retained employees I felt forced to lay off,” Godwin said.
Godwin early last year trimmed his workforce from 70 to just under 50 employees, because the original mandate under the Affordable Care Act required employers with 50 or more workers to provide health insurance starting this year, and Godwin was unsure his future sales could carry the estimated extra costs of $250,000 a year. He offers health insurance and pays 80 percent of the premiums, but most of his younger workers now opt out.
The administration last summer delayed the employer mandate until Jan. 1, 2015, and on Monday, announced another delay for medium-sized employees.
Businesses with 100 or more employees still face a Jan. 1 deadline, but can sidestep fines of $2,000 per employee if they offer insurance to 70 percent of their employees who work 30 hours or more a week. They have to ramp that up to 95 percent by 2016.
Employee benefits consultant Maschino, Hudelson & Associates supports the delay, Partner J. Kelly Hudelson said.
“We believe delays to improve legislation can be viewed as positive,” Hudelson said. “We’ve spent the last four years preparing companies for ACA compliance, and it’s proven extremely frustrating for our clients to comply with the continually changing legislation.”
Larry Gundlach of Oklahoma Business Insurors agreed.
“This gives these employers additional time to develop strategies to provide their employees with affordable qualified health plans,” he said. “It also gives the insurance marketplace more time to develop plans that are responsive to the employer and employees’ health insurance needs.”
But Oklahoma City employee benefits consultant Cher Bumps said Monday’s announcement makes no sense.
“Why waive the mandate for (business employing) 51 to 99, but kick in for companies 100-plus?” she said. And seasonal employees working less than six months now don’t have to be measured, she said.
McAfee & Taft employee benefits consultant Brandon Long said the changes may sow confusion.
“While the White House is doing this to try to help employers … at least in the short term, this adds more complexity to an already moving target,” Long said.
Crowe & Dunlevy health care attorney Cori Loomis agreed.
“Some employees of those employers will still want and need health insurance coverage and some may face a penalty under the individual mandate if they don’t have it,” Loomis said. “Many medium-sized employers will be under a lot of pressure to provide coverage to their employees anyway.”
Tami U’Ren, comptroller of Southwestern Roofing & Metal Inc., which employs 110 to 150 annually and whose owner chose to pay 100 percent of premiums for employees and their families when Obamacare was passed, said it will be interesting to see what percentage of employers furnish the coverage versus pay the less-expensive fine.
“Our company has chosen to cover all employees through the National Roofers Union at a cost of approximately $7,500 per year per employee,” U’Ren said. “The Union insurance available to us was priced less than half the cost of insurance available through our local insurance agent. It is a huge expense, but going forward I would imagine most good companies will provide coverage to their employees and their families.”
In other provisions announced Monday, the administration said:
•Volunteer firefighters and others who give of their time will not be considered employees under the health care law. Some volunteer fire departments worried they might have to shut down if forced to provide health insurance.
•Adjunct faculty members at colleges will be deemed to have worked 2 hours and 15 minutes for each hour of classroom time they are assigned to teach. Officials said that means someone teaching 15 hours a week in the classroom would be considered full-time and eligible for coverage, but someone teaching 12 hours may be considered part-time.