Sept. 22--Businesses -- those with 50 or more workers -- scored some additional breathing room this summer in complying with what has become a vexing component of the Affordable Care Act, to offer health care to their employees by Jan. 1.
In July, the White House announced that the employer mandate, which requires business with 50 or more employees to provide health care benefits or pay a penalty, was delayed until Jan. 1, 2015.
"We believe we need to give employers more time to comply with the new rules," Valerie Jarrett, senior advisor to President Obama, said in a statement on the White House blog.
But many workers at small and large businesses are starting to feel the dramatic shift in the health care landscape. Others will be lucky and see no change at all.
Shawn Evenhaim, founder and CEO of Canoga Park-based California Home Builders, has about 25 people on the payroll and he offers them health care through the business. And they will still have it after Jan. 1, Evenhaim said.
"We have been providing it for many years. I am a true believer that employees need the right health benefits. I think they should have a pension and medical," said Evenhaim, who started his company in 1994.
His business uses subcontractors to build single-family and multi-family housing and currently has 10 projects under way and about 1,000 trades people at the job sites. Evenhaim is worried that the new health care law would adversely affect the home building industry, which is in a recovery mode.
Good help may be hard to find, he said.
"I have some vendors that have 40 employees and they say the won't hire more because of the health care act (requirement)," Evenhaim said. "We need more and more people to grow. In our industry it's getting busier and we have a shortage of supplies and a shortage of labor. Obamacare is not the only reason but it's one of the reasons."
"I'm not happy with how Obamacare went down and the main reason is I don't think everyone studied it enough," he added. "I don't think people understand it and 99 percent of business owners today don't understand what it means."
But Gary Toebben, president and CEO of the Los Angeles Area Chamber of Commerce, is optimistic that the new law will have benefits.
"There will be many small businesses that will find some new opportunities in private health care under the Affordable Care Act," he said. "Employees will be able to look to the new exchange that is being created and review and study those and determine what is the best option for them."
Businesses can also take advantage of federal tax credits the law will provide. And he anticipates that there will be a variety of plans offered in the marketplace.
In August, Covered California, the state's marketplace exchange, announced health insurance plans for small business owners ready to start shopping around. Blue Shield of California, Chinese Community Health Plan, Health Net, Kaiser Permanente, Sharp Health Plan and Western Health Advantage are among the carriers to offer low cost plans.
"For every family and every company it will be different," Toebben said of the coverage. "Some of the prices quoted for individual coverage through the exchange have been much lower than you can currently get in the private marketplace, especially if you are older," Toebben said.
The chamber has been holding information seminars explaining the health care act and another session will be presented by the California Endowment. It will present an Employee Wellness Conference on Nov. 8 from 7:30 a.m. to 1:30 p.m. at the chamber offices, 350 S. Bixel St., Los Angeles.
"I don't think any of us know yet what is going to happen. Sometimes in a new system it's very difficult to predict consumer behavior," he said.
Some fallout is already occurring in advance of the Jan. 1 implementation.
More than 250 businesses across the country have slashed employee hours or implemented other measures to deal with costs associated with the new law, according to the Los Angeles-based Investors Business Daily. The publication has been tracking the number of employers that have cut hours because of the employer mandate, and the number had reached 258 as of Sept. 3.
UPS, the nation's fourth-largest employer, last month said that in some cases spouses would be dropped from the company's health care plan if the spouse could obtain care from their employer.
And various outlets reported last month that Los Angeles-based Forever 21, the teen fashion retailer with about 30,000 workers nationwide, would cut some employees to 29.5 hours per week, just under the mandate required 30 hours for company-provided care, at some of its stores.
However, the company said that few of its workers would be affected and the new law was not a factor in the decision.
"Forever 21, like all retailers, staffs its stores based on projected store sales, completely independent of the Affordable Care Act. After a recent evaluation, Forever 21 realigned its staffing needs to better reflect sales expectations. This realignment impacted 196 employees, less than 1 percent of all U.S. store employees," company spokeswoman Annie Austerlitz said.
Still, there is uncertainty about how the Affordable Care Act will affect businesses.
For example, 15 percent of Americans don't know what Obamacare is, according to a report released this month by Bankrate.com. The report also said that 28 percent of Americans are feeling more negative about the Affordable Care Act now than they were 12 months ago -- twice as many as the 14 percent who are feeling more positive.
Businesses, as well as the public, have a steep learning curve ahead.
"We're just three weeks away from when the new health insurance exchanges will begin accepting applications, and we're still observing a disturbing lack of consumer education," Bankrate.com insurance analyst Doug Whiteman said in a statement. "If this doesn't change soon, millions of Americans could miss important deadlines or make uninformed decisions."
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Original headline: Affordable Care Act: Reform concerns some business owners
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