Health Care Reform Continues to Be a Moving Target

As many of you know I am a Board Member of the North Carolina Restaurant and Lodging Association as well as an active Restaurant Owner.  This is hot off the presses from the NCRLA and I think it does a great job of quickly and clearly explaining where we are as a nation on health care reform and how it effects the business owners like you and I.  Your state may have a couple other options or a slightly different spin on this but as a whole it applies nationally to all of us.

The Health Care reform debate has dominated news headlines in recent months.  It is a difficult issue and many dollars are being spent on both sides of the debate. As always, NCRLA, NRA, and AH&LA continue to fight for fair treatment of our industry in any bill that should be constructed.  Currently the architecture of the bills being discussed by the House and Senate are constantly changing and being revised.   The following is an update on the current state of the issue.

The Latest:
On Tuesday, October 12, the Senate Finance Committee passed an $829 billion plan which it hopes will extend health care coverage to an additional 29 million Americans.  The next step for the bill is a formal debate in the full House and Senate.

Some Details on the recently passed bill:

•    The bill would be paid for in part by cutting spending on several health care programs — including Medicare — by roughly $400 billion. Another $200 billion would be generated by imposing a new tax on high-end health care policies, called “Cadillac” plans by critics.

•    New fees would be imposed on drug and insurance companies, medical device manufacturers and other industries tied to the health care sector.

•    Individuals would be required to purchase coverage or face a fine of up to $750

•    Companies with more than 50 full-time workers would have to pay a fee of up to $400 per employee if they do not offer health insurance.

•    Businesses with 25 or more employees would be required to offer insurance or pay a fine of $750 a year for each employee not covered.

•    As a way to stimulate competition and drive down premiums, the bill would provide $6 billion toward the creation of non-profit, member-run health insurance companies in each state.

•    If the House and Senate manage to pass health care reform bills, a conference committee would then negotiate a final version requiring approval from both chambers before going to Obama for his signature.

Affect on Hospitality Industry
Obviously the mandates proposed in this bill would greatly affect small businesses in our industry.  It remains unclear what the ultimate definition of “full-time” will be in any final bill that is agreed on between the House and Senate, but in the Senate version of the bill part-time employees are not mandated to be covered by their employers.

There are possible subsidies that would allow employers offering health insurance to their employees to be eligible for a tax credit.

•    Employers with fewer than 25 employees and paying an average annual wage of less than $40,000 would be eligible for a tax credit of up to 50% of the employer’s contribution toward the employee’s health insurance premium. The credit would vary depending on the company’s size and level of contribution toward employee premiums.

•    The addition of the non-profit health insurance companies in each state could end up driving costs down for premiums, however it appears that there will still be no way to shop for health insurance across state lines, which could have driven down costs even further.

As always, we will keep you updated on any breaking news.  We continue to fight for fair treatment of the industry on our member’s behalf, and look forward to a positive resolution to this issue.

Let me know what you think of the current Health Care Reform discussions and the effect on you and our industry.

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