WASHINGTON — Retail groups voiced strong opposition to employer mandates in an $849 billion bill unveiled by Senate Democrats Wednesday night that would overhaul the health care system and assess fees on employers to help pay for workers eligible for government health insurance subsidies.

This story first appeared in the November 20, 2009 issue of WWD. Subscribe Today.

The National Retail Federation and the Retail Industry Leader Association were critical of the bill’s employer requirements, while Wal-Mart Stores Inc., which supports a mandate for businesses to pay for employee health care, remained neutral on the Senate bill.

The AFL-CIO, on the other hand, lent overall support for the bill, but expressed concern over several issues, including employer mandates that the union said fall short in providing more coverage to workers.

With the support of two independents, Senate Democrats have 60 seats, the number needed to stop an expected Republican filibuster. Senate Majority Leader Harry Reid (D., Nev.) has scheduled a procedural vote by this weekend — the first hurdle where he must meet the 60-vote threshold — to begin debate on the bill. Lawmakers have acknowledged the congressional process will likely spill over into next year. If the Senate passes a measure, the House and Senate would still have to produce and each pass a compromise bill to send to President Obama for his signature.

The landmark health care legislation, which Reid said would cost $849 billion over the first 10 years, would provide coverage to an estimated 31 million uninsured Americans and cut the federal budget deficit by $127 billion through new taxes and fees and a slowdown in the growth of Medicare, Reid said, citing an analysis by the Congressional Budget Office.

Employer mandates have divided the retail industry. A large swath of retailers, including the NRF, opposes them, but Wal-Mart supports them.

“We’re not commenting on specific legislation,” said a Wal-Mart spokesman. “But we obviously are supportive of an employer mandate as we have been for months. That has not changed.”

Union groups are pressing for even stronger employer mandates.

“The bill’s inclusion of a public insurance plan option to hold private insurance companies accountable is a tremendous step,” said Richard Trumka, president of the AFL-CIO. “And the legislation should be praised for its other fair financing plans, including an increase in the Medicare tax on the wealthiest and an employer responsibility requirement, which we believe should be expanded to include more employers.”

The prospects for an employer mandate are becoming stronger as the legislation advances through Congress.

“Employer mandates are inevitable,” said Robert Bruno, associate professor of labor and industrial relations at the University of Illinois. “If there are going to be individual mandates [requiring employees to have health insurance coverage], it would be politically suicidal not to ask employers, with certain exemptions for smaller firms, to also be included in the mandate. It’s a political necessity.”

The Senate bill would require companies that don’t offer full-time workers health insurance to pay a government fee to subsidize eligible workers to apply for government aid to buy health insurance in an exchange. If one employee receives a subsidy through the new health care exchange system, firms with more than 50 employees would have to pay a fine equal to $750 for every person on their payroll — a provision meant by proponents to encourage employers to provide health care to their workers.

“We see that as being onerous in its own right,” said Neil Trautwein, vice president and employee benefits counsel for the NRF. “The only partial glimmer of hope is that it only applies to full-time employees, but we are not entirely confident the Senate will not add a requirement for part-time employees during the debate.”

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