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Wed July 3, 2013
N.H. Businesses Get Extra Year To Sort Out Mandate Under Health Law
Some New Hampshire businesses say they welcome news of a recent delay in a key part of the Affordable Care Act.
On Tuesday, the Obama Administration announced it is postponing the so-called employer mandate by a year, citing a need for more time to simplify regulations.
It was this provision that Senator Kelly Ayotte, speaking at the Republican National Convention last summer, offered as a reason why she thinks Obamacare won’t work.
"Just a couple of months ago, a successful restaurant owner in Concord, New Hampshire told me about his dilemma," she told the crowd in Tampa, Florida. "He wanted to open up a second restaurant, and hire more employees. But you know what? He realized that if he did, he would trigger penalties under Obamacare."
Those penalties can run high: as much as $2,000 per employee for any business with 50 or more employees that doesn’t offer health insurance.
And while an overwhelming majority of New Hampshire’s large companies do currently provide insurance to workers, that’s not the case for some retailers and restaurants.
So Mike Somers with the New Hampshire Lodging and Restaurant Association welcomes news of the delay.
"Well, I think it is a little bit of a relief at this point."
Instead of kicking in January 1st of 2014, the employer-mandate is now pushed back a year, along with the penalties. Somers says companies can use the time to continue assessing their options.
"More than anything, I think this will allow more time to educate business owners, get them up to speed on exactly what they need to do, when they need to do it, and all those kinds of pieces of the puzzle."
It is a complicated puzzle for some businesses, especially those with seasonal or part-time employees. And there’s been concern that some firms would cut benefits, since a $2,000 tax is likely less expensive than offering health insurance.
Steve Gerlach is a tax attorney with Bernstein Shur. He advises companies on the Affordable Care Act, and cautions his clients to think long-term about how decisions impact a workforce and ask themselves these questions.
"If we cut coverage, or we don’t offer coverage, are we going to be able to hire the people that we need? Are we going to keep the people we want to keep happy?"
There is no change in law to the individual mandate of the Affordable Care Act. That provision still kicks in January, 2014.