Industry reacts to ruling on health care law
June 28, 2012
by Erica Shaffer
KANSAS CITY, Mo. – Reaction to the US Supreme Court’s decision to uphold the constitutionality of the Patient Protection and Affordable Care Act ranged from concern to outright dismay as industry stakeholders began to assess the ruling.
In a 5-4 vote, the Supreme Court largely upheld the constitutionality of President Obama’s health care law by ruling that the penalty for not carrying health insurance is a tax and was justified under Congress’s power to impose taxes. However, the court did find the law’s Medicaid expansion unconstitutional because it threatened states’ existing Medicaid funding. Chief Justice John Roberts wrote the opinion for the majority, which was joined by Justices Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor and Elena Kagan. Dissenting were Justices were Antonin Scalia, Anthony Kennedy, Clarence Thomas and Samuel Alito.
"As employers of millions of full-time, part-time and seasonal workers, uncertainty still remains for food retailers in every community in this country," said Leslie Sarasin, president and chief executive officer of the Food Marketing Institute (FMI).
“As employers, food retailers will need to follow government agencies’ yet-to-be-released criteria for determining which employees are required to be offered health coverage under PPACA and whether that employer-offered coverage, as required under the new law, is deemed ‘affordable’ and passes the ‘minimal value’ requirements in the statute," Sarasin said. “Within the coming 18 months, federal agencies must issue new regulations covering all of these issues and more, and each company across the industry will be forced to decide how best to adjust its health coverage and work schedules, to comply with the new law — or whether to simply withdraw from offering coverage and pay any penalties that may be required."
The National Restaurant Association (NRA) expressed strong concerns about the ruling, saying the court’s decision to uphold the majority of the law, including employer requirements, threatened the economic health of the restaurant industry. NRA said that under the law, employers with 50 or more full-time equivalent employees must offer "affordable" health insurance of minimum value to full-time employees and their dependents or pay penalties. The association argued that the costs of coverage or the penalties could threaten the restaurants' profit margins.
"This unworkable law cannot stand as is," said Dawn Sweeney, president and CEO of the NRA. "We need reform that addresses the increasing costs our members are faced with each year. Restaurant owners are looking for solutions that will allow them to provide better health care coverage options for their team members, but they cannot be saddled with excessive costs and regulatory burdens that threaten their very business.
"We ask members of Congress to take action that helps the restaurant industry continue to help create jobs and grow the national economy," she added.
The National Council of Chain Restaurants (NCCR) echoed some of the NRA’s sentiments, saying the law imposes a costly burden on the chain restaurant industry and thousands of small business franchisees and their employees.
“The ACA imposes heavy mandates on employers using punitive penalties for non-compliance," said Rob Green, executive director of the NCCR. "The law will particularly damage the chain restaurant industry, which operates on thin margins and cannot support costly government imposed mandates. Many chains have indicated they will have no choice but to cut back on workers’ hours or close restaurants in order to avoid the penalties."
Several trade associations said they would continue to push for repeal of the law. House Majority Leader Eric Cantor said the House will vote on repealing the ACA after the July 4 recess.