MILWAUKEE — The Obama administration's decision to delay a health care obligation for employers until 2015 is being applauded by many in Wisconsin's business community who say they could use the extra time to understand the new law and its options.
Some employers said they've been working on compliance for months and would have been ready by the Jan. 1 deadline. But others said there's so much complexity that they're grateful for the postponement, the Milwaukee Journal Sentinel reported (http://bit.ly/16Ry57x ).
At issue is the so-called pay-or-play rule, a provision of the Affordable Care Act that would apply to any employee who works at least 30 hours per week. The provision, which applies to employers who have the equivalent of more than 50 full-time employees, imposes two conditions:
— Employers who don't provide health benefits would pay a $2,000 penalty for each employee who qualifies for subsidized coverage and buys health insurance through the online marketplaces called exchanges.
— Employers who provide health benefits that cost more than 9.5 percent of an employee's income would pay a $3,000 penalty for each worker who qualifies for subsidies who buys insurance through the exchanges.
The looming deadline and threat of penalties was a concern to Ray Lipman, the chief executive of Westbury Bank in West Bend. The bank has about 150 employees, including about 50 part-time workers.
"We were getting down to the wire here," Lipman said. "And there was concern about the penalties."
The law defines a full-time worker as one who works 30 or more hours per week on average. But for some employers, determining who meets that requirement turned out to be surprisingly complicated.
For example, an employee on a salary, such as a part-time lawyer or adjunct professor, may be paid based on working 24 hours a week while in reality working more than 30 hours a week, said Rich Yurkowitz, a benefits consultant with Aon Hewitt.
"It is not as simple as you work in a factory and you work 40 hours," Yurkowitz said.
Retail and restaurant chains, which generally hire a large number of part-time workers, also are among those most affected by the new law. Two industry associations, the Retail Industry Leaders Association and the National Restaurant Association, praised the administration's decision.
For other employers, the pay-or-play penalty wasn't likely to have as much effect. Most large employers provide health insurance: 98 percent of those with more than 200 employees and 94 percent of those with between 50 and 199 employees, according to the Kaiser Family Foundation.
Strattec Security Corp. in Glendale was ready for the regulations, said Patrick Hansen, the company's chief financial officer. The company, which makes automotive keys and locks, has 380 employees in the Milwaukee area and 2,600 worldwide.
"We actually have been working on it for the last six months," Hansen said. "It's extra work but you can deal with it."
Opponents of health care reform have criticized the penalty, saying it gives companies an additional incentive to hire employees only part time. They also contend that employers would cut workers' hours because of the provision.
But benefits consultants said hiring part-time workers would make scheduling and staffing more complex.
"The most talented employees are going to be in demand, and they are not going to accept a job that doesn't offer benefits and that is part time," said Dan Levin, a principal with Buck Consultants.