Mandating Health Care

Boon for associates, burden for retailers?

By Katherine Field
November 1, 2007

The idea that every American should have access to affordable, highquality health care isn’t new, nor is it without weighty support. Democratic presidential candidates Hillary Clinton, John Edwards and Barack Obama are pushing for mandatory universal healthcare coverage in varying degrees. And Republican rival John McCain outlined his own plan for a sweeping health-care system overhaul.

Although just two states—Massachusetts and Vermont—have passed legislation to ensure that all state residents have health insurance, a host of other states as well as the federal government are making health-care reform a top-tier topic on their legislative agendas. (At presstime, a 200-page working draft of the California universal health-care language had just been made available to stakeholders and media, although the draft is reputed to be largely incomplete.)

To explore what a potential universal health-care system could mean to retail employers, and how the laws in Massachusetts and Vermont could guide other states’ activities, Chain Store Age talked with Lori Dustin, chief marketing officer for Woburn, Mass.-based human-resources service provider High- Roads who has a front-row seat to the Massachusetts universal health-care action.

According to Dustin, Massachusetts’ “Chapter 58 of the Acts of 2006” promises that every person in the Commonwealth will have health-care access by 2009. “In short,” explained Dustin, “Massachusetts mandates that any employer with 11 or more full-time employees in Massachusetts must prove that 25% of its full-time employees are enrolled in its benefits programs, and that it is paying at least 33% of the premiums.”

Five Tips to Minimize the Universal Health-Care Burden

As universal health-care mandates go into effect, HR professionals inherit the massive burden of ensuring all employees have coverage and key benefits information is reported to fully comply with the stringent laws. The result is an administrative nightmare.

According to Lori Dustin, chief marketing officer of Woburn, Mass.-based HighRoads, retail professionals need to stay as proactive as possible—even if their stores fall within state lines that haven’t passed similar bills. Following are Dustin’s five practical methods to reduce the cost impact of these programs, ensure full government compliance and maintain ongoing success:

1) Centralize and automate all detailed plan designs for your existing health-care plans;

2) Educate yourself on the status of all major health-care provider contracts— in the event they have to be changed;

3) Integrate and automate employee population and enrollment details by plan and location;

4) Be prepared to generate disruption reports for required changes to plans by state, brought on by these mandates; and

5) Learn what your competitors are doing to comply with both existing and pending mandates.

Other mandates that particularly impact retailers, said Dustin, are a requirement to offer a cafeteria, or pre-tax contribution, plan and an increase in the age of dependent-care coverage from the standard age 18 to 26.

“Universal health care affects retailers more than any other type of employer, due to their mixed populations,” said Dustin. Retailers employ a varied mix of fulltime, part-time and temporary associates, with a high turnover rate, making it extremely difficult to regularly gauge whether 25% of the full-time employees are enrolled in the offered benefits plans.

HighRoads assists retail giants such as TJX Cos. and Staples to put compliance plans in motion. The company recommends launching a mandate-compliance program by first gathering information.

“Take a snapshot of your employee population, of the details of the plans being offered, of the enrollment at any point in time as a percent of the total population and of the enrollment as a percent of the total full-time employee population,” she said. Moreover, Dustin added that retailers need to know the exact details of offered benefits plans and be able to assess the cost and disruption to alter those plans if required.

To more readily comply with current laws and prepare for impending legislation, retailers may consider automation. “Automating plan information and centralizing the information will better prepare an employer once states pass their own mandates,” said Dustin.

“This is just the beginning,” Dustin said. “With an election coming up and pending federal and state legislation, retailers need to be aware of what legislation has passed, what is pending, and have a way of improving the transparency and the visibility of their offerings and their populations in order to prepare for this.”

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