State and local employers told two members of Congress April 30 that the Affordable Care Act could force cuts in programs or services and limit their future expansion.
U.S. Reps. Phil Roe, R-Tenn., chairman of the House Subcommittee on Health, Employment, Labor and Pensions, and Richard Hudson of North Carolina’s 8th District led the field hearing, titled Health Care Challenges Facing North Carolina’s Workers and Job Creators, at Rowan-Cabarrus Community College.
Opponents argued that as health care costs continue to rise, the law’s requirements for employers could force business owners to cut employees’ hours or reduce their workforce. Advocates said the law’s long-term benefits outweigh the short-term burdens.
Starting next year, President Obama’s health care law will require businesses with 50 or more full-time employees to provide government-approved insurance or face a tax penalty. The law defines a full-time employee as a person working 30 or more hours per week.
Several of the employers who spoke said administering the new law would be a major hurdle, but they won’t know how difficult it will be until after July, when the Internal Revenue Service examines some of the language in the 13,000-plus pages of regulations. The definition of a full-time worker could change from 30 hours per week to 35 or 40 hours per week.
Roe, a former physician in obstetrics and gynecology, said he supports the intent of the law but thinks its construction and implementation are too complex.
“The more we find out about it, and the more rules they write, the harder it is to implement,” he said.
Roe and Hudson listened to the testimony and asked a group of about 10 panelists questions during the two-hour hearing. Roe said he will share the concerns he heard with his subcommittee.
Panelists who spoke in support of the law included Dr. Olson Huff, a longtime pediatrician from Asheville, and Adam Searing, director of the Health Access Coalition at the N.C. Justice Center in Raleigh.
“People are acting like the sky is falling,” said Searing, adding that people aren’t taking the time to fully grasp the benefits of the new law. In North Carolina, roughly 95 percent of businesses have fewer than 50 employees and will be exempt from the law’s requirements, he said.
“A lot of the arguments I heard were the same ones I’ve been hearing since the law passed,” said Searing. “I think the business leaders have some very legitimate points with the fees, auto-enrollment and things like that.
“But if Republicans in Washington could just stop trying to get rid of the whole bill and sit down to try fix some of these issues that are coming up, then we can make some progress addressing some of the things business owners are worried about.”
Other benefits, said Searing, include allowing adults to stay on their parents’ health care plan until age 26; eliminating co-payments for many preventive health care measures; and making it harder to charge different people different amounts for the same coverage based on gender or pre-existing conditions.
The focus should be about increasing the quality of our health care system, said Huff, because improving care and access to health care can help bring down costs over time.
“We are laboring in this country under a deficit of health,” said Huff. “We have to improve our health care, because we are paying out the nose for what we are currently achieving. We’ve got to be able to reduce the costs, and we do that by making sure everyone in the country has access to health care. Quality is a key component of the Affordable Care Act’s intention, and that is what will drive down the cost and improve the health of our population.”
Opposition from businesses
Among the panelists opposed to parts of the new law were business owners Ken Conrad, chairman of Libby Hill Seafood Restaurants in Greensboro; Chuck Horne, president of Hornwood Inc. in Lilesville; Bruce Silver, president and CEO of Racing Electronics in Concord; and Ed Tubel, founder and CEO of Tricor Inc. in Charlotte.
A survey released by the U.S. Chamber of Commerce found that the 2010 health care law is a top concern for small businesses. The survey found that 77 percent of small-business owners believe the law will make health care coverage more expensive, while 71 percent believe it will make hiring more difficult.
Panelist Dave Bass, vice president of compensation and associate wellness at Delhaize America, said his company worries about penalties it could face as it learns how to implement the law. The 30-hour threshold for full-time employees also could pose a problem for the Delhaize America-owned Food Lion, based in Salisbury.
Delhaize employees who work more than 35 hours a week currently can join the company’s health insurance plan, and about 45 percent of its workers are classified as full-time.
“We strongly believe that 35 hours is an adequate definition (of ‘full time’),” Bass said. “The expansion of that to 30 hours would create confusion and an added cost to us.”
Hudson said he agrees with some provisions in the law but would rather give consumers and businesses more power to make decisions.
“I think we share the goal of having the best health care in the world in this country and have it accessible to everyone, at a price people can afford,” he said. “I want to see us move toward more access and more affordability but keep that quality of care.”
The law and RCCC
Panelist Tina Haynes, chief human resources officer for Rowan-Cabarrus Community College, said the college will have to cut back on courses taught by its adjunct faculty because of IRS guidelines that determine staff eligibility for benefits.
Without a change, instructors won’t be able to teach more than three courses of three credit-hours each without exceeding the 30-hour threshold.
“Reducing the course load for adjunct faculty is the only way that Rowan-Cabarrus can avoid the unfunded liability of additional health care costs,” Haynes said. “This further compounds the problem for adjuncts who still aren’t covered by health insurance and now have a reduction in income because we reduced the number of hours they will be working for us.”
Current state funding doesn’t allow RCCC to cover adjunct professors’ health benefits. Because of the IRS guidelines and interpretations of instructors’ workload and eligibility status, RCCC is having to redefine the role of its adjunct faculty as it starts to hire instructors for next year’s courses.
RCCC officials say the college will have to decrease those adjunct faculty members’ workload below 30 hours per week unless the IRS ruling in July addresses discrepancies in the language in the law. A possible solution would be a waiver program – for instructors already insured on their spouses’ plans, for example – that relieves the college of liability of not providing health insurance to instructors who are considered full-time employees.
Paula Dibley, a spokesperson for RCCC, said the one-size-fits-all formula to determine benefits eligibility limits how much teachers can work. Penalties for not complying with the new law could further cripple the college’s funding and its role in the community.
The state legislature cut the college’s funding last year by $1 million, and the college will lose $2 million more this year, said Dibley.
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