This is the first of three parts on how Obamacare will affect LBM dealers
The Supreme Court’s decision affirming the constitutionality of the government’s massive health care reform package has put LBM dealers on a complicated and potentially expensive trek to compliance—if only anyone knew the right way to get there.
“I have no clue, our employees have no clue, and I’ll bet you some insurers have no clue, either,” laughs owner Loren Hall, whose Mathew Hall Lumber in St. Cloud, Minn., pays 75% of the cost to insure 55 of its 70 employees and their families, and has seen its health care costs rise by 15% to 20% annually in recent years
“Nobody knows what’s going to happen; it’s still so up in the air,” says Paula Siewert, president of the Northwestern Lumber Association in Minneapolis. “And I don’t see our guys rushing out to find out how it’s going to affect them.”
Bruce Shelter, general manager of Capps Home Building Center in Virginia, got an inkling of the potential confusion last spring when he received a phone call out of the blue from a Florida-based insurance agent who he says came on strong with a high-pressure sales pitch about the need for this dealer to quickly set up an appointment so the agent could “analyze” Capps’ health-insurance plan, which covers 25 of its 38 employees.
Capps expects agents, insurers and businesses across the country will be scrambling for business as the industry gets transformed.
“It’s going to be the Wild West out there,” he predicts.
Capps and every other company in the United States must now deal with the ramifications of the Patient Protection and Affordable Care Act, a behemoth also known by the shorthand term Obamacare, which Congress passed in 2010 and which is projected to cost at least $1.083 trillion over the next decade.
Under the act, by Jan. 1, 2014, all Americans must be insured either through their employers or by purchasing policies from state-run exchanges. (As of mid July, 15 states had set up exchanges.)
Many questions remain unanswered about the Act, including how the exchanges will operate and be funded, and what burdens of compliance and taxation companies and individuals must bear.
Dealers and employees won’t find much consolation in critics’ complaints that the Act does little to restrain premiums at a time when, according the Kaiser Family Foundation, average family premiums for employer coverage rose 113% over the past decade. The country now shells out $2.6 trillion on healthcare annually, equal to 17.9% of the nation’s gross domestic product in 2010. That figure is expected to jump to 19.6% by 2021.
This isn’t a topic pro dealers seem comfortable discussing in detail, either, when only three of 30 companies ProSales tried to contact for this article responded to interview requests.
In early July, the National Lumber and Building Material Dealers Association wasn’t at the point where it could offer strategic advice, said its regulatory counsel, Frank Moore. But advice is what dealers will desperately need as they navigate this sea of uncertainty to arrive at practical decisions about if and how they can afford to offer employees healthcare coverage.
After struggling through a prolonged recession during which their benefits plans and employee relations often took major hits, the last thing dealers need is to be facing a massive health care overhaul and asking “What’s next?”
In part two, we’ll look at key issues and deadlines triggered by the Act.