House Bill 3962 passed the U.S. House of Representatives last Saturday, and with the vote, which was a close one, the first steps have been taken towards comprehensive health care reform in America. The primary provisions of the bill include:
- Roughly 96% of Americans would be covered
- Businesses with less than $500,000 in payroll costs would be exempt from providing mandatory health care
- Businesses and individuals would be able to shop for and purchase health care in a new Health Insurance Exchange, which would feature insurance options from private companies, co-ops, and a new government run option
- Businesses with over $500,000 in payroll costs who do not provide their employees with health insurance would pay a 2% – 8% tax that would be paid into the Health Insurance Exchange
- Individuals cannot be denied coverage because of preexisting conditions
Here’s what Dawn Sweeney, president of the National Restaurant Association (NRA) had to say last week, as quoted in Nation’s Restaurant News: “Unless portions of the legislation are tailored to reflect the economic and operational realities facing our industry, we will be forced to oppose the bill.” The NRA and several other industry groups have actively voiced their opposition to the House version of the health care bill. Most of these groups also say they favor some kind of reform, as long as it doesn’t put an undue burden on business.
Obviously, the most contentious part of this bill for restaurateurs is the requirement to provide coverage for employees if your annual payroll exceeds $500,000. Yet 90% of businesses in the restaurant industry have less than 50 employees. Additionally, the 2% penalty for not providing health coverage to your business’ employees could actually provide an affordable and easy out for many mid-sized businesses. That’s because 2% of your payroll is cheaper than providing health coverage for your employees.
The obvious counterpoint to this is that these businesses don’t have to pay anything at all for health care now, so any increase, whether through mandated coverage or the penalty that results from avoiding this coverage, puts a burden on an already struggling industry.
It’s difficult to balance the concerns of business versus the health coverage needs of employees and individuals. The debate surrounding health care reform is a virtual minefield of misinformation, confusing provisions, and contentious debate. And it’s certain that the House health care bill will change significantly once it meets a very different version currently being considered in the Senate.
All this means we don’t know what we can expect from the legislative process regarding health care reform. No matter what, many people are going to be unhappy. Others are going to wonder what it all really means. And no one is really going to know how this reform is going to affect them for some time to come.
What’s your opinion on health care reform and how it will affect the food service industry? Leave a comment below!