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Associated Press, Published July 04 2013

Minnesota companies applaud delay in health care rule

ST. PAUL — The Obama administration's decision to delay a health care obligation for employers until 2015 is a relief for some Minnesota companies that welcome the extra time to understand the new law and its options.

The delayed provision would penalize employers with at least 50 full-time workers if they don't offer their employees insurance coverage. Now they'll have an extra year to decide whether to offer coverage or pay thousands of dollars in penalties, the St. Paul Pioneer Press reported.

In Minnesota, business leaders cheered the delay even as policy experts downplayed its impact on the state's health insurance market.

“Obviously, there's relief because this was not a realistic goal,” said Kate Johansen, director for health policy at the Minnesota Chamber of Commerce. “That said, it still remains a problem because it's slated to go into effect a year later.”

The postponement won't affect a huge number of companies. The Kaiser Family Foundation says 98 percent of U.S. companies with more than 200 employees already provide health insurance, as do 94 percent of those that have 50 to 199 employees.

“Employers try to offer these benefits to stay competitive in the workforce market, and, secondly, they do it to satisfy a social contract that they have with those employees,” said Stefan Gildemeister, a state health economist at the Minnesota Department of Health. “Those two dynamics are probably not affected by this delay.”

The new health law imposes penalties of $2,000 to $3,000 per full-time employee for companies that don't provide affordable coverage. The total penalty would depend on the number of full-time workers at the company.

By postponing implementation of that aspect of the law, does that mean employers will have an incentive not to offer health insurance for another year? Probably not, said April Todd-Malmlov, executive director of Minnesota's health insurance exchange.

“Employers offer coverage because they need to attract a good workforce, and that's not going to change going into the future,” she said. “There could be a small impact but I really don't anticipate it will be anything substantial.”