Members of the Charlotte-area business community reacted with shock and relief at the Obama administrations unexpected announcement Tuesday that a central provision of the new health care law is being delayed one year.
This requirement, which was designed to expand coverage for the uninsured, mandates that businesses with 50 or more employees working 30 or more hours a week must provide health coverage to full-time employees or face fines. Companies with fewer than 50 employees, a category that accounts for the majority of U.S. business, dont have to offer coverage.
Rather than start next year, the so-called employer mandate wont go into effect until Jan. 1, 2015.
That was such a surprise, a great surprise, said Jim Lawrence, founder and owner of Providence Landscape Group, who estimates the new requirements would have added $160,000 to $180,000 in additional expenses in 2014.
Lawrences company, which manages some of the citys most prominent properties, has up to 120 full-time employees in peak season.
His 25 employees with administrative jobs have health insurance through the company, he says. But his field workers who in the past preferred to opt out rather than pay a share of the monthly premium dont get benefits.
Come Jan. 1, 2015, Lawrence will have to offer insurance for them as well.
Thats the No. 1 issue thats been hanging out there for us, Lawrence said. At least it gives us another year to strategize.
Senior benefits consultant Emily Knowles of the Charlotte-based firm Benefit Controls Companies says her firm has worked with employers of all sizes around the U.S. to manage the financial impact of the Affordable Care Act.
They were oftentimes depressing conversations, Knowles said. It was actually kind of nice to ... be giving phone calls with somewhat good news for once.
Assistant Secretary for Tax Policy Mark Mazur wrote in a blog post Tuesday that the additional year was a response to the concerns about the complexity of the requirements and the need for more time to implement them effectively.
In an emailed statement, Democratic U.S. Sen. Kay Hagan of North Carolina applauded the Obama administration for listening to the small-business owners concerns that the reporting and tracking requirements were too burdensome.
Some argue that real relief wont come unless the health care overhaul itself is revamped.
U.S. Rep. Robert Pittenger of District 9, a Republican who has spearheaded efforts to repeal aspects of the new health care law, told the Observer on Wednesday that he thinks Democrats are delaying the mandate to keep from debating the law in next years congressional elections.
The only thing it may improve is ... (theyll) go back and reassess the absurdity of what theyve done, Pittenger said.
Gary Salamido, vice president of government affairs for the N.C. Chamber, said he doesnt think the delay however welcome it may be will do anything to solve one of the states biggest problems: unemployment.
I would be surprised if a one-year reprieve is going to cause any hiring, Salamido said. The last thing a business of any size wants to do is hire someone and let them go the next year.
McMillan: 704-358-6045 Twitter: @cbmcmillan
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