Three Ways Obamacare Could Change Retail Forever

shopping, mall, store display

Photo: Flickr / antwerpenR

Retailers said they were “dismayed” after the Supreme Court upheld Obamacare yesterday.Even though the law’s been in affect for 17 months, retailers haven’t made any moves to comply with the new regulations. They say that doing so will break the bank and keep them from earning profits.

But now that it’s been upheld, there are three questions that retailers will be asking, according to the Retail Industry Leader’s Association blog.

RILA’s Christine Pollack says:

  1. Will the Administration thrust dozens of delayed rules onto employers with little regard for the challenges associated with such quick implementation?
  2. Will the Administration be emboldened by the Supreme Court’s decision and produce rules that ignore the costs and concerns employers have expressed about rigid employer-mandate rules?
  3. Will the Administration recognise the need to protect the crown-jewel of America’s healthcare system, employer-sponsored coverage, and preserve flexibility in the system that allows employers to design coverage options reflective of the needs of their workforce?

These are big concerns for the retail industry. Pollack says that retailers fear they’ll be “overregulated” and unable to provide affordable healthcare at all.

Much of this fear revolves around the “Employer Mandate Tax,” which doesn’t take effect until January, 2014. 


Employer Mandate Tax (Jan 2014):  If an employer does not offer health coverage, and at least one employee qualifies for a health tax credit, the employer must pay an additional non-deductible tax of $2000 for all full-time employees.  Applies to all employers with 50 or more employees. If any employee actually receives coverage through the exchange, the penalty on the employer for that employee rises to $3000. If the employer requires a waiting period to enroll in coverage of 30-60 days, there is a $400 tax per employee ($600 if the period is 60 days or longer). Bill: PPACA; Page: 345-346

So, retailers will have make a decision. They can either eliminate employee health plans after 2012 if the penalty is actually lower than what they’d have to pay for a health insurance plan, or pay for it themselves.

Either way, there will be costs. But even if retailers thought the Supreme Court would strike it down, many of the big retailers have been planning for the worst since the health care overhaul first came up.

DON’T MISS: Here Are Ways Retailers Can Profit From Obamacare >

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.