Supreme Court Healthcare Ruling Seen as Blow to Retailers

The 5-4 U.S. Supreme Court decision upholding the constitutionality of the 2010 Patient Protection and Affordable Care Act (PPACA) -- more familiarly known as “Obamacare" -- has touched off a wave of concern among the retail industry, which views the law as imposing onerous requirements on store operators in their role as employers.

“Today’s Supreme Court ruling upholds PPACA’s multitude of reporting requirements and mandates for food retailers and wholesalers to offer health coverage to their employees,” noted Leslie G. Sarasin, president and CEO of Arlington, Va.-based Food Marketing Institute (FMI). As employers of millions of full-time, part-time and seasonal workers, uncertainty still remains for food retailers in every community in this country.”

Explained Sarasin: “As employers, food retailers will need to follow government agencies’ yet-to-be-released criteria for determining which employees are required to be offered health coverage under PPACA and whether that employer-offered coverage, as required under the new law, is deemed ‘affordable’ and passes the ‘minimal value’ requirements in the statute. Within the coming 18 months, federal agencies must issue new regulations covering all of these issues and more, and each company across the industry will be forced to decide how best to adjust its health coverage and work schedules, to comply with the new law -- or whether to simply withdraw from offering coverage and pay any penalties that may be required.

Additionally, according to Sarasin, the law contains two provisions that particularly affect grocers: “a restaurant-menu labeling requirement that was incorporated into the legislation just prior to its passage, followed by a proposed rule from FDA that could expand to supermarkets the regulations intended for restaurants, and a requirement that customers present a doctor’s prescription before being allowed to use an FSA debit card to purchase over-the-counter medicines at their local food stores, while continuing to allow the use of FSA debit cards to purchase eligible items that are not medicines.”

“The Court missed an opportunity to redress the many shortcomings of the law,” said the Washington, D.C.-based National Retail Federation (NRF), which has also published a blog post by its VP of government affairs, Christine Pollack, that bluntly called the Affordable Care Act “no good for employers.” “As it stands, the law wrongly focuses more on penalizing employers and the private sector than reducing health costs.” The federation added that the legislation would “have a dramatic, negative impact on every employer and employee in the United States, and further constrain job creation and economic growth.”

Despite their overall disappointment at the ruling, food industry trade groups expressed an intention to deal proactively with the situation at hand.

“With the Supreme Court decision now behind us, the focus must turn to the employer mandate and the effect that impending changes to employer-sponsored coverage will have on the nearly 170 million Americans who receive health care through their employer,” said Sandy Kennedy, president of Arlington-based Retail Industry Leaders Association (RILA). “President Obama repeatedly assured Americans that if they liked their health insurance, they could keep it. However … with just 17 months until the law takes effect, and no meaningful implementation guidelines available for employers, those assurances are in doubt.

Kennedy warned, “While retailers are committed to continuing to provide health coverage to their employees, overregulation jeopardizes their ability to do so.”

“[T]he best approach for future progress continues to be saving lives, enhancing patient care and reducing health care costs,” said Alexandria Va.-based National Association of Chain Drug Stores (NACDS). Noting that Americans not taking their medications properly are responsible for billions in added health care costs and hundreds of thousands of lives lost, the association said: “The Medication Therapy Management Empowerment Act of 2011 (S. 274) introduced by Sen. Kay Hagan (D-NC) and the Medication Therapy Management Benefits Act of 2011 (H.R. 891) introduced by Reps. Cathy McMorris Rodgers (R-WA) and Mike Ross (D-AR) both have bipartisan support. These commonsense bills can help patients understand the importance of taking their medications as prescribed, which can lead to improved health as well as lowering their health care costs.”

Vowed Peter Larkin president and CEO of the Arlington-based National Grocers Association (N.G.A.), “With this decision, N.G.A. will redouble its efforts to minimize the impact and burdens on independent retail grocers by continuing to work closely with fellow members of the Employers for Flexibility in Health Care Coalition to educate the administration on the important need for maximum flexibility in regulatory requirements.”

Larkin added that the organization would “also continue to work closely with Congress to address key provisions and requirements of the law that are most troublesome to N.G.A., such as the 30-hour threshold for full-time employees, the need for maximum flexibility when determining an employee’s status as full or part-time and the chain restaurant-menu labeling provision that Congress did not intend for grocery stores. Additionally, N.G.A. will continue to educate our members on how to implement and comply with the law, which can be a challenge for even the most sophisticated operations.”

The other organizations also pledged to work with the Obama administration and Congress to address retailers' concerns regarding the law.