If you want more hours spent making Cheesy Bacon Pretzel Dogs for Sonic restaurants, you might be in luck.
Greg S. Cutchall plans to lift his ban on new employees' working more than 30 hours a week at his restaurants, thanks to a delay in enforcing a part of the federal Affordable Care Act.
The one-year delay in federal reporting on health insurance and possible penalties for big and medium-size businesses restored Cutchall's enthusiasm for part timers at his 50 restaurants in five states — and raised his hopes that more changes may follow.
“I think the bill was intended to help, but the bill is so flawed,” Cutchall said. “I really hope they scrap the whole bill and start over. They need to simplify it. It's such a hardship on small businesses.”
While most businesses and employees won't see much impact from the delay, it's important for some, even if it is only temporary relief from a new set of government paperwork.
Most likely to gain from the delay are businesses with 50 to 150 employees and few or no benefits. That includes food service businesses that have considered cutting employees' hours to fewer than 30 per week to stay below the 50-employee threshold that will require detailed reporting. Now the reporting and penalties won't kick in until 2015.
“There probably was a giant sigh of relief that came over those businesses,” said Cliff Gold, chief operating officer of CoOportunity Health, a Des Moines insurance cooperative that offers coverage in Iowa and Nebraska. “A lot of businesses were struggling with that. This will indeed give them some breathing room.”
The Obama administration said Tuesday that it was responding to concerns of businesses by waiting until 2015 to enforce the reporting requirements and penalties for businesses with 50 or more full-time employees.
The “employer mandate” was a key part of the law intended to extend coverage to millions of uninsured Americans. The law passed in 2010 amid intense controversy that has continued.
“It's a relief that it's postponed,” said Tiffaney Kuper, a benefits analyst for the Nebraska Furniture Mart, which offers comprehensive health coverage to its 2,900 employees and their families. “Everything that's come out about it has been very unclear as far as the rules, not very well-thought-out. It's a relief that they're giving us more time so they can come up with more clear instructions.”
Working to comply with the law has been time-consuming and interfered with trying new and innovative efforts for the company and its staff, Kuper said.
“I think the intent is good. It's just the execution that's not working. They're not taking into account what actually happens in a company's human resources department.”
For many companies, however, the delay won't make a difference, said Steve Martin, CEO of Blue Cross and Blue Shield of Nebraska. Employers that haven't offered coverage probably won't offer it in 2014, and those that offer coverage most likely will continue to offer it.
That's the case at First National Bank, spokesman Kevin Langin said. “First National Bank has always offered health care coverage to its employees and will continue to do so. Delaying this provision will also not impact premiums.”
Dean Hodges, who owns 13 Jimmy John's restaurant franchises in the Omaha area, said the same: “What they do in Washington will have little effect on our plans. We will do what we can to comply with the law as it is presented to us. If we can, we will implement as if the law goes into effect on Jan 1, 2014.”
Martin expects premiums to follow the same course as usual — namely upward, especially for younger people — because of other provisions of the law.
“All of the stuff that's really going to affect pricing and premiums is very much scheduled to be implemented,” said Scott Sullivan, a benefits consultant for N.P. Dodge Co. in Omaha.
That includes requiring insurance companies to accept all applicants for coverage, limiting the differences in premium costs between individuals and requiring policies to cover “essential benefits” defined by the law, including maternity benefits in individual policies for both men and women.
“All those things are moving full steam ahead,” Sullivan said.
A few clients don't understand that it's just one part of the law that's been delayed, said attorney John Schembari, a partner at the Omaha office of Kutak Rock who said phones have been ringing nonstop from clients with questions since the delay was announced.
With no penalties next year, some business owners who don't offer insurance are saying they won't next year, either, he said.
Brent Hodgen, human resources manager for QAT Global, an IT consultant with 43 employees in Omaha and five other states, said the delay may not have a direct effect but “kind of gives us an extra year to plan,” even though he said the company already offers good health coverage.
“We've gone up to the ledge and looked over, but we need to know that the ledge is still there,” said Hodgen, who expects political leaders to look closely at the law in the coming year.
“If anything, it seems that maybe they're starting to see that this is not the cure that they were looking for, and I guess that what they've proposed maybe wasn't the silver bullet,” he said. “It might be a signal that confidence is eroding on this.”
After three years of anticipation that the employer mandate would start Jan. 1, many companies are like Omaha discount brokerage TD Ameritrade:
“We are still evaluating how the delay will affect our plans for 2014 benefits,” said spokeswoman Kim Hilyer. “As of right now, we have not made any changes. But if we find something that would necessitate a change in plans, premiums or other aspects of our offering, we'll make them and communicate with our employees accordingly.”
Steve Nichols, chief financial officer for Prime Communications, an Elkhorn IT firm with about 150 employees, said the company is still looking into the effects of the delay.
He said he hoped elected officials would use the time to rework or rescind the law, since the many unknowns about health insurance are hindering expansion for Prime and its clients.
In the next few weeks, employers still will be required to inform their employees about the Oct. 1 start of insurance exchanges, or state-by-state marketplaces for people to buy insurance, if necessary. Employees still have to buy coverage through their employers if it's available unless, generally speaking, it costs them more than 9.5 percent of their income.
The exchanges' eligibility and subsidy rules remain in effect, and some observers think the delay in the employer mandate will send more people to the exchanges because their employers won't have penalties as an incentive to offer coverage in 2014.
Cutchall's restaurant company has a total of 1,400 employees, including about 1,000 full-time and part-time employees in Omaha and Lincoln. The firm offers health care coverage to any employee who works 32 hours or more a week and will continue that policy next year.
To manage impending health care costs, the company has been limiting the hours of new part-time hires to less than 30 hours a week. “We are definitely going to lift that ban,” Cutchall said.
The announcement also makes it more likely that the company will rethink its plan to sell some restaurants, he said. “We might consider keeping them now.”
World-Herald staff writers Russell Hubbard, Janice Podsada and Barbara Soderlin contributed to this report.