Now that legislation revamping the nation’s health-care system has been signed into law, construction companies and unions are poring over its provisions, trying to determine the impact of its sweeping changes. Some suggest the measure, enacted on March 30, will drive up firms’ premiums. Others are taking a wait-and-see approach. “The devil is always in the details,” says Stuart Binstock, CEO of the Finishing Contractors Association.
Whether the law will produce the benefits its architects hope for isn’t clear, says American Subcontractors Association spokesman David Mendes. “When you’re talking about budget reductions and the costs for the program,” he says, “there is some reason to be skeptical that without some very tight cost controls, the reform may not be as successful as many expect.”
The bill’s arduous journey through Congress ended with two steps. First, the version the Senate passed on Dec. 24 was approved by the House and signed by President Obama on March 23. On March 25, the Senate and House cleared a package of “corrections” to the bill Obama had signed two days before.
One key correction was the deletion of language sponsored by Sen. Jeff Merkley (D-Ore.) that would have required construction firms with six or more full-time workers and a $250,000 minimum payroll to offer employees health insurance or pay penalties. Some construction groups fought Merkley’s plan; unions backed it.
Although Merkley’s provision is gone, Geoff Burr, Associated Builders and Contractors’ vice president for government affairs, sees little to celebrate. “The bill overall is so bad,” Burr says. He says ABC is opposed to the statute’s new taxes, employer requirements and penalties for companies whose coverage is deemed “inadequate.”
The loss of the Merkley provision is a defeat for unions and their allies, such as the Finishing Contractors Association. Still, Binstock says positive items survived, such as a requirement that companies with more than 50 employees must offer insurance to workers by 2014. He also cites a hike in the penalty for firms that do not offer health insurance, to $2,000 per worker from $750 per worker.
|Merkley requirement: Eliminated.|
|Employer Mandate: Beginning in 2014, employers with 50 or more full-time workers that do not offer coverage and at least one employee receives a tax credit through an exchange, are required to pay a penalty of $2,000 per full-time worker. Employers whose coverage is deemed inadequate also must pay a penalty.|
|Small-Business Tax Credits: Companies that provide health coverage and have 25 or fewer employees with average wages of less than $50,000 will receive a tax credit: Effective on Jan. 1, 2010, tax credits will cover up to 35% of premiums. Beginning in 2014, the tax credits will cover 50% of premiums.|
|Health-Care Exchanges: Establishes state-based health-care exchanges through which individuals and small companies with up to 100 employees can purchase coverage, starting in 2014. Exchanges expanded to larger employers in 2017.|
|High-value-plan excise tax: Delays implementation of excise tax on high-value “Cadillac” health plans until 2018.|
|Sources: ENR, Speaker of the House; Aon Consulting|