By  on September 17, 2009

WASHINGTON — Retailers on Wednesday generally backed the Senate Finance Committee’s $856 billion, 10-year health care reform proposal but expressed concerns about its costs.

The committee on Wednesday unveiled a proposal that would require companies that don’t offer full-time workers health insurance to pay a government fee to subsidize federal tax credits. Retailers said the employer requirements in the plan were a marked improvement over the mandates for health insurance coverage in proposals from four other committees.

Sarah Arbes, vice president of government affairs at the Retail Industry Leaders Association, which counts mass merchants such as Wal-Mart and Target stores as members, said RILA has “pretty significant concerns” about the employer requirements, but “it is a dramatic improvement over the other two major bills under consideration.”

Sen. Max Baucus (D., Mont.), chairman of the finance committee, who led three months of intense negotiations with a small group of Democrats and Republicans in his committee to try to strike a bipartisan compromise, stood alone at a news conference and unveiled the draft legislation without Republican backing.

The Senate finance panel is the last of five Congressional committees to craft proposals and had been widely seen as the one shot at a bipartisan compromise. Three House panels and one Senate panel have already passed their own bills on party line votes.

Employer mandates have pitted Wal-Mart Stores Inc. against a large swath of the retail industry. Most retailers, including the industry’s largest trade group, the National Retail Federation, oppose Wal-Mart’s support of the concept of employer mandates.

“This was an effort to get a bill that can pass,” said Baucus, responding to a question about why there were not stronger employer mandates in the legislation. “I decided it made more sense not to have an actual mandate for employers that do not provide coverage. On the one hand, we want to keep the employer-based system and keep employers providing coverage for employees. On the other hand, you’ve got to make sure insurance is not too onerous for employees and employers do not drop employees too easily.”

The Senate finance bill would require all employers with more than 50 employees who do not offer coverage to reimburse the government for each full-time employee — defined as those working at least 30 hours a week — receiving a “health care affordability tax credit” in a new state insurance marketplace or exchange. It does not place requirements on employers to cover part-time employees that work fewer than 30 hours a week.

Arbes noted that in the Baucus bill retailers would face the lesser of two possible “penalties” — either a flat dollar amount for the company’s uninsured employees based on the average cost of a state’s tax credit or $400 multiplied by a company’s number of employees, both the insured and uninsured. The measure also states that if employers already offer some form of health insurance coverage to employees, the worker would be ineligible for a health care affordability tax credit for health insurance purchased through a state exchange.

“This is clearly the least onerous of all of the mandates out there,” said Neil Trautwein, vice president and employee benefits policy counsel for the NRF, comprised of some of that nation’s largest department store groups. “For one thing, it only applies to employees with 30 or more hours of service. That is a pretty positive approach. Clearly it is better than the 8 percent pay-or-play mandate in the House. It is better than the mandate for full and part-time employees in the Senate [Health, Education, Labor & Pensions Committee] bill.”

The two bills in the Senate and three in the House must be reconciled into one piece of legislation in each chamber. If both measures then pass, a single compromise bill would then need to be crafted and brought back to the House and Senate for final passage. President Obama would then have to sign the bill, but given Democratic control of both houses of Congress, any final measure would presumably have his approval.

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