Employers Bowing to Inevitable

Employers Bowing to Inevitable AP / Eric Gay REDEPLOYING: Dollar General Corp. is among the companies and organizations that have reported reduced or no insurance mandate-related lobbying this year after disclosing advocacy on it last year.

As time runs out to persuade the sitting Congress to kill or further delay the Affordable Care Act’s mandate that employers provide health insurance to their workers, trade groups and big companies in the service industry are redeploying their forces and reluctantly preparing to live with the law.

“The vast majority of clients are morose but not mutinous,” said Alden Bianchi, who leads the employee-benefits and executive-compensation practice at Mintz, Levin, Cohn, Ferris, Glovsky and Popeo.

Staffing agencies, retailers and other companies that rely heavily on temporary workers, and experience more employee turnover, are “scrambling” to meet the deadline, said Bianchi, who counts among his clients the American Staffing Association, an industry trade group.

Neil Trautwein, vice president and employee-benefits policy counsel for the National Retail Federation, said his members are “working hard” to prepare but “continue to believe that the employer mandate is not needed.”

Effective on Jan. 1, 2015, companies with at least 100 full-time employees must provide health insurance to 70 percent of those workers or face penalties of $2,000, multiplied by their numbers of full-time workers minus the first 30 employees. For each full-time employee forced to buy subsidized insurance through a state or federal exchange because their company’s health plan is too expensive, a business will face a $3,000 penalty.

The mandate had been scheduled to take effect on Jan. 1, 2014, but the Obama administration delayed implementation under pressure from the business community. Full implementation is set for 2016 — by then, large ­businesses will have to cover 95 percent of their employees.

While members of the service ­industry are hastily readying themselves for the mandate, banks, law firms and other businesses with stable workforces and health-care plans for most of their employees are “far along” in their preparations for the law’s reporting and affordability requirements, Bianchi said.

3M Co. is among the companies in the latter category. David Overstreet, assistant general counsel for benefits at 3M, said his company will meet the January deadline. 3M, with 35,000 full-time employees in the United States, has a task force addressing the Affordable Care Act, he said. “I think we’re in good shape.”

Congressional records don’t reflect that 3M specifically lobbies on the employer mandate, although it did report advocacy regarding its implementation. The National Retail Federation did disclose lobbying on the mandate. The group, which bills itself as the “world’s largest retail trade association,” counts Dick’s Sporting Goods Inc., Macy’s Inc. and Wal-Mart Stores Inc. among its members. During the first half of this year, it spent $1.8 million on federal lobbying including mandate-related advocacy, according to congressional records.

But the focus of that lobbying has shifted from killing the mandate to its interpretation, Trautwein said. For example, the retailers have sought repeal of a provision requiring them to automatically provide insurance unless workers voluntarily decline coverage. “We will continue to fine-tune it,” Trautwein said of the federation’s approach to the mandate.

In 2013, lobbyists for 40 organizations specifically noted in quarterly reports to the House that they’d lobbied on the “employer mandate.” By 2014, lobbyists for only 19 of those organizations included that exact phrase in their reports — although some organizations, including the retail federation, noted advocacy related to the mandate. Stephen Brophy, vice president for government affairs for Dollar General Corp., and National Association for Home Care & Hospice lobbyists from DLA Piper were among those reporting lobbying on the mandate during 2013 but haven’t mentioned any advocacy concerning it this year.

Dollar General spokeswoman Crystal Ghassemi declined to comment. William Dombi, vice president for law at the home care and hospice group, confirmed that his organization hasn’t used DLA Piper partner Mary Langowski or any of the other lobbyists at the firm to advocate on the employer mandate in 2014.

The organization, however, this year has used its staff to advocate for bills to postpone the mandate and change how the Affordable Care Act defines full-time employees, he said. The group has said the mandate would hurt Medicaid-oriented home-care agencies. They generally don’t offer health insurance to their workers and can’t raise their prices, according to the association.

Katie Mahoney, health policy director for the U.S. Chamber of Commerce, noted “quite a lot of ebb and flow” on the matter in Washington. But unlike other organizations, her group has continued to report lobbying involving the mandate, which it opposes.

Despite dim prospects for repealing the mandate this year, businesses haven’t lost all hope. If Republicans take control of the Senate and maintain their hold on the House in the November elections, lobbying could pick up, Trautwein said. The retail federation is prepared to continue the fight, he said. “We’re really focused on the long haul,” Trautwein said.

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