HEALTH CARE QUARTERLY: Reform presents conundrum for businesses

Obamacare is a uniter, not a divider.

At least that’s the case with an important rule in the federal health insurance reform law that governs who can buy coverage through the workplace.

Both business owners and labor unions agree that the regulation could slash away at full-time employment and undermine consumers’ incomes. But they don’t agree on how to fix the issue. Several bills pending before Congress suggest very different approaches, and it’s not clear yet which — if any — of the proposals will win out.

To understand the bills, start with the rule that inspired them.

The Affordable Care Act says employees who work more than 30 hours a week qualify as full time, and employers have to offer them insurance or risk fines of $2,000 to $3,000 per worker. The regulation applies to any company with more than 50 full-time-equivalent workers.

Observers say the threshold is causing unintended consequences as employers drop workers below 30 hours to avoid the cost of coverage.

That could have big effects on the Las Vegas economy, with its high share of hourly service jobs in hospitality and restaurants, said Shaun O’Brien, assistant policy director for health and retirement for big labor group AFL-CIO. And with average weekly hours worked coming in at 33.7 in August, according to local research firm Applied Analysis, plenty of Las Vegans hover close enough to the threshold to cross it.

“Obamacare is supposed to be helping those who can’t afford insurance, but it’s actually hurting them by forcing their bosses to cut back on hours,” said Randi Thompson, state director of the National Federation of Independent Business.

Added Yvanna Cancela, political director of the hospitality union Culinary Local 226, “Unless fixes are made by the administration and Congress, hard-working Americans will be taking a giant step back rather than a big step forward when it comes to health care.”

No one tracks local changes in full- versus part-time employment, but Cancela pointed to U.S. Chamber of Commerce studies showing that 31 percent of franchised small and midsized businesses have already cut hours more than a year before the employer mandate takes effect on Jan. 1, 2015. Another 27 percent said they’ve replaced full-timers with part-timers. Among nonfranchised businesses, 12 percent have cut hours, and 12 percent have swapped out full-timers.

Metro Pizza hasn’t cut hours among the 240 employees at any of its six Las Vegas locations, and it doesn’t want to, co-founder Sam Facchini said.

“We’ve run a family like business for a third of a century in Las Vegas, and we understand that we cannot do it without our employees,” Facchini said. “First and foremost, it would be awfully hard to cut a full-time employee’s hours down under 30 a week without really devastating that person’s lifestyle. But you’re also changing the business model we’ve structured. We can’t provide that pizza-dining experience without great employees who are happy to be there and who believe in what we believe in.”

Still, 75 percent of Metro’s employees work fewer than 40 hours a week, and 90 percent work around that 30-hour mark. That means Metro’s owners, like legions of other businesses, could have decisions to make as the employer mandate looms in 2014, Facchini said. Forget about merely cutting hours; Metro may have to raise prices, too.

“It’s a matter of business survival in many cases, and our company would be no exception,” he said. “We would need to be very mindful of how we make the math work so that we could pay our bills week to week and month to month. It’s that way for almost any business. I think pushing that full-time threshold down to 30 hours actually destroys jobs, I really do.”

But on how to patch the problem, businesses and labor unions differ dramatically.

Bills that would change the law have been before the House of Representatives since early 2013. The Forty Hours is Full Time Act would set the workweek at, well, 40 hours. And the Save American Workers Act would repeal the 30-hour threshold and also replace it with a 40-hour standard.

Reps. Mark Amodei, R-Nev., and Joe Heck, R-Nev., are co-sponsoring the Save American Workers Act.

Government transparency group Civic Impulse doesn’t give either bill good odds. The group’s GovTrack website says the Forty Hours is Full Time Act has a 1 percent chance of passing the House, while Amodei’s and Heck’s bill has a 5 percent shot.

Those poor prospects are a good thing, union leaders say. They’re partial to a bill that would leave the 30-hour threshold in place and apply fines to a share of part-time workers. The Part-Time Worker Bill of Rights Act has no Nevada co-sponsors, and, according to GovTrack, no chance of enactment, either.

In a perfect world, O’Brien said, the full employer penalty would kick in at 20 hours, and companies would pay a prorated fine on employees who work fewer than 20 hours. That’s because if you move the penalty limit to 40 hours, companies would simply cut off employees at 39 hours a week.

“That threshold is really a cliff,” O’Brien said. “The basic problem is that if you create an hours cliff, you put people at risk of having their hours reduced by an employer in order to avoid any responsibility for coverage and risk of paying a penalty.”

But the AFL-CIO’s suggestion simply isn’t possible for most businesses, said Frank Nolimal, an employee benefits consultant with Las Vegas insurance brokerage Assurance Ltd.

“It’s not mathematically feasible for a company to employ people at union income levels and provide full benefits at 20 hours a week,” Nolimal said. “The cost of health care per employee would skyrocket because premiums aren’t going to change. Employers would just have to pay more.”

What’s more, most labor laws already recognize a 40-hour week, Facchini said. Overtime rules are based on it, and corporate paperwork revolves around it.

“We have a historical precedent to work with, and I see it as the logical threshold for any labor-related bill,” he said. “You’re going to have a real battle in Congress if we start looking at setting different levels of penalty. It sounds like the more explosive and onerous option. And it’s much more of a record-keeping challenge, because we have people who fall just above or below 20 hours. Where do you draw the line? How often does someone have to work 19 hours before you pay a lower penalty, or 21 hours before you have a different penalty?”

Either way, both sides said they’re confident lawmakers will eventually change the rule, one way or another. Lawmakers and President Barack Obama have already delayed the law’s small-business health insurance exchanges, put the employer-coverage mandate on hold for a year and repealed a 1099 tax-form mandate and a long-term insurance program, among more than two dozen other tweaks.

“All of the rollbacks in Obamacare so far are, to me, an indication that someone is at least willing to look at these things and say, ‘This isn’t working,’” Thompson said. “It seems like, every time something gets implemented and doesn’t work, they say, ‘OK, let’s fix that.’ ”

ad-high_impact_4
Business
Bellagio, MGM Resorts International’s luxury hotel turns 20 – Tara Mack
The more than 3,000-room Bellagio hotel is situated on the site of the former Dunes Hotel. The Dunes was imploded in 1993, and construction of the Bellagio started in 1996. It cost $1.6 billion to build, making it the most expensive hotel in the world at the time. The Bellagio was former Wynn Resorts Ltd. Chairman and CEO Steve Wynn’s second major casino on the Strip after The Mirage. MGM Resorts International acquired the property from Steve Wynn in 2000. (Tara Mack/Las Vegas Review-Journal)
Facial recognition software at G2E – Todd Prince
Shing Tao, CEO of Las Vegas-based Remark Holdings, talks about his facial recognition product. (Todd Prince/Las Vegas Review-Journal)
Former NBA player, Shaquille O'Neal, speaks about his new Las Vegas chicken restaurant
Former NBA player, Shaquille O'Neal, speaks about his new Las Vegas chicken restaurant. Bizuayehu Tesfaye/Las Vegas Review-Journal @bizutesfaye
Bobby Baldwin to leave MGM
MGM Resorts International executive and professional poker player Bobby Baldwin is set to leave MGM.
Caesars has new armed emergency response teams
Caesars Entertainment Corp. has created armed emergency response teams. They are composed of former military and law enforcement officials. "These teams provide valuable additional security capabilities,” Caesars spokeswoman Jennifer Forkish said. Caesars is hiring Security Saturation Team supervisors, managers and officers, according to LinkedIn. The company did not say how many people it plans to hire for the units. (Las Vegas Review-Journal)
Las Vegas, airlines prepare for CES
CES in January is expected to attract more than 180,000 attendees. (Las Vegas Review-Journal)
AGS partners with Vegas Golden Knights
AGS is the nation’s second-largest manufacturer of Class II slot machines used primarily in tribal jurisdictions. It announced a marketing partnership with the Vegas Golden Knights NHL team. (Las Vegas Review-Journal)
Lehman Brothers bet big on Las Vegas
Lehman Brothers collapsed 10 years ago, helping send the country into the Great Recession.
Fremont9 opens downtown
Fremont9 apartment complex has opened in downtown Las Vegas. (Marcus Villagran/Las Vegas Review-Journal) @marcusvillagran
Ross & Snow launches in Las Vegas
Luxury shoe brand Ross & Snow has opened in Las Vegas, featuring "functional luxury" with premium shearling footwear. (Bailey Schulz/Las Vegas Review-Journal)
Remote Identification and Drones
DJI vice president of policy and public affairs discusses using remote identification on drones. (Bailey Schulz/Las Vegas Review-Journal)
Drones and public safety in Nevada
Two representatives in the drone industry discuss UAV's impact on public safety. (Bailey Schulz/Las Vegas Review-Journal)
Frontier Airlines to launch flights from Las Vegas to Mexico
Frontier, a Denver-based ultra-low-cost carrier, will become the first airline in more than a decade to offer international service to Canada and Mexico from Las Vegas when flights to Cancun and Los Cabos begin Dec. 15. (Rick Velotta/Las Vegas Review-Journal)
MGM Resorts International CEO Jim Murren addresses Oct. 1 lawsuits
MGM Resorts International Chairman and CEO Jim Murren addresses criticism his company has received for filing a lawsuit against the survivors of the Oct. 1 shooting. (K.M. Cannon/Las Vegas Review-Journal)
MGM Resorts International opens the doors on MGM Springfield
Massachusetts’ first hotel-casino opens in downtown Springfield. The $960 million MGM Springfield has 252 rooms and 125,000-square-feet of casino. (K.M. Cannon/Las Vegas Review-Journal)
MGM Resorts International prepares to open MGM Springfield
Las Vegas-based MGM Resorts International gave news media and invited guests a preview of the $960 million MGM Springfield casino in Massachusetts. The commonwealth's first resort casino will open Friday, Aug. 24. (K.M. Cannon/Las Vegas Review-Journal)
A Walk Through Circus Circus
It only takes a short walk through Circus Circus to realize it attracts a demographic like no other casino on the Strip: families with young children. (Todd Prince/Las Vegas Review-Journal)
Morphy Auctions, a vintage slot machines seller, wants gaming license
Vice president Don Grimmer talks about Morphy Auctions at the company's warehouse located at 4520 Arville Street in Las Vegas on Thursday, Aug. 16, 2018. (Rick Velotta/Las Vegas Review-Journal)
Nevada's venture capital money doesn't stay in state
Zach Miles, associate vice president for economic development for UNLV, said there’s venture money in Southern Nevada, “but trying to find the right groups to tap into for that money is different.” According to a 2017 report from the Kauffman Foundation, Las Vegas ranked number 34 out of 40 metropolitan areas for growth entrepreneurship, a metric of how much startups grow. With a lack of growing startups in Las Vegas, investment money is being sent outside of state borders. The southwest region of the U.S. received $386 million in funding in the second quarter, with about $25.2 million in Nevada. The San Francisco area alone received about $5.6 billion. (source: CB Insights)
Neon wraps can light up the night for advertising
Vinyl wrap company 5150 Wraps talks about neon wraps, a new technology that the company believes can boost advertising at night. (Marcus Villagran/Las Vegas Review-Journal) @brokejournalist
Nevada on the forefront of drone safety
Dr. Chris Walach, senior director of Nevada Institute for Autonomous Systems, talks to a reporter at NIAS's new Nevada Drone Center for Excellence of Public Safety, located inside the Switch Innevation Center in Las Vegas. K.M. Cannon Las Vegas Review-Journal @KMCannonPhoto
Motel 8 on south Strip will become site of hotel-casino
Israeli hoteliers Asher Gabay and Benny Zerah bought Motel 8 on the south Strip for $7.4 million, records show. They plan to bulldoze the property and build a hotel-casino. Motel 8 was built in the 1960s and used to be one of several roadside inns on what's now the south Strip. But it looks out of place today, dwarfed by the towering Mandalay Bay right across the street.
Project billed as one of the world's largest marijuana dispensaries plans to open Nov. 1
Planet 13 co-CEO Larry Scheffler talks about what to expect from the new marijuana dispensary, Thursday, July 19, 2018. (Marcus Villagran/Las Vegas Review-Journal) @brokejournalist
Oasis Biotech opens in Las Vegas
Brock Leach, chief operating officer of Oasis Biotech, discusses the new plant factory at its grand opening on July 18. (Bailey Schulz/Las Vegas Review-Journal)
UNLV Tech Park innovation building breaks ground
Construction on the first innovation building at the UNLV Tech Park is underway. (Bailey Schulz/Las Vegas Review-Journal)
Life
Celebrity photographer dedicates dance book to Las Vegas shooting victims
Behind the scenes with local celebrity photographer Jerry Metellus as he talks about his Dance For Vegas coffee book dedicated to the 58 victims of the October 1 shooting. (Marcus Villagran/Las Vegas Review-Journal) @marcusvillagran
Dreamsickle Kids Foundation founder Gina Glass talks awareness
Gina Glass, 35, founded Dreamsickle Kids Foundation to raise awareness for sickle cell disease in Nevada. (Jessie Bekker/Las Vegas Review-Journal)
The Meadows School founding kindergarten teacher retires after 34 years at the school
Linda Verbon, founder of the The Meadows School's kindergarten program and the first faculty member hired at the school, retired in the spring after 34 years at The Meadows. (K.M. Cannon/Las Vegas Review-Journal)
Kids become firefighters at Fire Station 98 open house
Henderson residents wore fire hats, learned about CPR and met firefighters at the Fire Station 98 open house Saturday, August 11, 2018. (Marcus Villagran Las Vegas Review-Journal) @brokejournalist
People from all over the world attend RollerCon 2018
RollerCon 2018 is a five-day convention focused on the roller derby community and culture at Westgate in Las Vegas. (Marcus Villagran/Las Vegas Review-Journal) @brokejournalist
TOP NEWS
News Headlines
Add Event
Home Front Page Footer Listing
Circular
You May Like

You May Like