The Obama administration’s decision to delay a mandate in the Affordable Care Act that employers offer affordable health insurance to all full-time workers will have the greatest impact on construction and tourism-related businesses, because they are least likely to meet the requirement, say insurance analysts and business owners.
The administration announced Tuesday that the “employer mandate,” which was to have been implemented by Jan. 1, will be delayed until 2015 to give businesses an extra year to comply with labor-intensive reporting requirements.
The delay will not affect uninsured workers’ ability to buy federally subsidized coverage through health care exchanges that are expected to be operating by Jan. 1.
Peter Daigle, chief operating officer of Bangor-based Lafayette Hotels, said he still isn’t certain how the mandate will affect his business, which operates 25 hotels and resorts in Maine.
Daigle said he is glad to have an extra year to understand the law and comply with its many requirements.
“It’s a very confusing piece of legislation, and it’s a mess,” he said.
The mandate requires businesses with 50 or more employees to offer affordable health insurance to all permanent, full-time employees within 90 days of their hiring.
Those that don’t comply will have to pay fines of $3,000 per affected employee or family member. The mandate’s postponement means those fines will not be assessed until 2015.
Business groups in Maine said the postponement is a positive step.
“Obviously (it’s) a pleasant surprise to see that there’s going to be more time,” said Christopher Hall, CEO of the Portland Regional Chamber.
Still, Hall said Tuesday’s announcement only delays problems that he anticipates many Maine businesses will have in meeting the requirements, which include detailed reporting on health insurance types, availability, monetary value and cost to employees.
“There may be a respite, but the law is still on the books,” he said.
Aside from the reporting requirements, the most likely impact on employers will be the additional cost of providing insurance for more employees, Daigle said.
The Affordable Care Act says employees can be charged no more than 9.5 percent of their salaries for their health insurance.
It does not restrict the amount they can be charged to add dependents.
Daigle said that requirement is more likely to cost his company money than other parts of the law, which include offering health insurance to seasonal employees who work 30 or more hours a week for at least 120 days.
Daigle said many of Lafayette’s seasonal workers already have coverage through parents, spouses or other means.
Under the mandate, businesses with 50 or more employees will be assessed a fine for every qualified full-time employee who signs up for health insurance through an exchange because the employer didn’t offer affordable coverage.
Besides tourism, the other industry in Maine that will be affected dramatically is construction, said Joel Allumbaugh, CEO of Hallowell-based National Worksite Benefit Group and a director of the Maine Heritage Policy Center, a conservative think tank.
Because of the transient nature of construction work, employers often don’t offer health insurance in an employee’s first six months, Allumbaugh said. That time frame will be cut in half by the employer mandate.
Consumer advocates expect the delay will have little effect on workers because they will be able to get affordable health insurance through the exchanges starting Jan. 1, said Mitchell Stein, policy director for Consumers for Affordable Health Care, a Maine-based advocacy group.
He said there has been confusion and erroneous reporting that employees of companies with at least 50 workers will not be able to buy subsidized insurance on the exchanges.
Stein said the delay might cause some logistical issues, because until 2015 the government won’t know which employers are offering affordable health insurance to their workers.
A worker who buys insurance on an exchange may have to sign a declaration stating that his or her employer is not offering benefits or that the benefits are too expensive, Stein said.
While some workers might lie on their applications or erroneously declare that they can’t get affordable insurance from their employers, that would last for only a year, until employers begin reporting that information to the federal government in 2015, Stein said.
“All they’re going to be getting away with is buying health insurance,” he said. “There might be people slipping through, but it’s not like they’re going to be getting a new car for free.”
It’s hard to tell whether the delay will affect the number of people signing up for the exchanges, said Kevin Lewis, executive director of Maine Community Health Options, one of two groups that plan to offer plans on Maine’s health care exchange.
But Lewis said he suspects it won’t make much difference because most people who will sign up likely won’t be working for large employers.
“The (health care exchange) marketplace is designed mostly for individuals or small groups,” Lewis said.
J. Craig Anderson can be contacted at 791-6390 or at:
Joe Lawlor can be contacted at 791-6376 or at: