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Employer Groups Pleased That Penalty Proposal Includes Some of Their Suggestions

By Rebecca Adams, CQ HealthBeat Associate Editor

January 2, 2013 -- Trade groups representing employers say they are pleased that the Treasury Department's proposed rule governing health law employer penalties includes some flexibility for businesses, although they say many store owners would like more time than the law allows to revise their IT and payroll systems.

The proposed rule, recently published in the Federal Register, gives some breathing room to companies whose health plans renew after Jan. 1, 2014, which is when the health care law (PL 111-148, PL 111-152) fully takes effect. The law imposes penalties for employers with 50 or more employees who work an average of 30 hours per week if the company does not offer affordable coverage that meets the law's requirements and an employee receives subsidized coverage in the exchange. The proposed rule makes it clear that employers whose plans do not renew on Jan. 1 will have until the plan does renew before they could face penalties. For instance, if a plan renews on July 1, then employers would be subject to penalties starting on that date.

The Retail Industry Leaders Association recently said that they and an alliance that they spearhead known as the Employers for Flexibility in Health Care Coalition had worked closely with Treasury regulators writing the rules. The coalition, which formed in 2011, includes the U.S. Chamber of Commerce and a wide range of companies.

"We appreciate the flexibility that Treasury proposed in these regulations," Christine Pollack, RILA vice president for government affairs, said in an interview. "Obviously it's taken a lot of discussion back and forth, especially for industries that are unique in that they have different hours and different busy periods. We're pleased that the proposed rules provide employers with flexibility so it's not a one size fits all approach but there remains unanswered questions."

Pollack said that employers are feeling squeezed by the tight health care implementation timetable and nervous about information that they don't yet have. She said that the group is still waiting to see how the Obama administration will ultimately decide to define some key terms, such as the "minimum value" of a health plan, in final regulations. The law requires plans to include a minimum level of benefits that will cover at least 60 percent of the costs of coverage. But it has not released final rules that give employers certainty about how that would be calculated.

The 144-page proposal was released in the Federal Register on Wednesday but the administration released them late Friday.

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