The Patient Protection and Affordable Care Act of 2010 and the Health Care and Education Reconciliation Act of 2010 became law in March of 2010 and are already having dramatic impact on Americans’ health care. As these laws are phased-in over the coming years, and potentially changed by Congress in the coming months, it may transform how individuals and businesses purchase medical insurance. These health care changes will be felt by all households and businesses over the coming months. But they may impact the vending industry’s bottom line in unique ways.
Because of these changes, vending operators face an uncertain future regarding their medical insurance.
There continue to be many unknown impacts on this far reaching bill. For example, according to the Congressional Research Service, it is “impossible” and “currently unknowable” to determine the number of agencies, boards and commissions that will be created under the new federal health care reform law.
The more than 2,000-page legislation will continue to face years of legal challenges, regulatory review and practical implementation in the free market. But as the legislation is studied, rules are written and the free market starts to operate, vending operators should consider several specific ways this law will impact their businesses.
Coverage needed by 2014
The law requires that every individual have personal health care coverage by Jan. 1, 2014. Individuals who don’t have health insurance will face a financial penalty. These individuals who need insurance can purchase it through five different types of plans including: state insurance exchanges, employer-sponsored plans, individual insurance plans, grandfathered group plans, and other coverage “recognized by the Secretary of Health and Human Services in coordination with the Secretary of the Treasury.”
Of concern to the vending industry should be the federal health care reform law on employer-sponsored plans and grandfathered group plans.
The National Automatic Merchandising Association (NAMA) offers five steps your company should take on employer-sponsored or grandfathered health care plans.
First and no surprise, we recommend that everyone in the vending industry become a member of your association. NAMA has a bipartisan government affairs team working to minimize this new law on your company’s bottom line. The smart vending operator will remain a NAMA member so we can keep you informed of changes and keep fighting to protect your company. Non-members may ultimately reap the rewards of NAMA’s efforts, but existing members will receive information first and will be the first to respond to changes.
For example, the health care law requires that soon anyone who owns or operates 20 or more vending machines will have to disclose the calorie count of all food and beverages sold in their machines. The Food and Drug Administration is currently writing the rules on how calorie disclosure will take place. Some argue that a label on the front of the packaging is the solution. Others recommend a calorie label at each spiral or stack. NAMA prefers one menu which lists the calorie counts of all products which might be in a bank of machines.
We know that the new health care law requires calorie labeling. What the FDA will require isn’t yet known.
But the members of NAMA have a seat at the table, and will be the first to know in the Spring of 2011 how they must comply with calorie labeling regulations.
Threshold: 50 employees
Second, vending companies must be careful when you grow beyond 50 employees. If you have 50 or fewer employees, you may receive tax credits and assistance today. You won’t face federal penalties in the future. However, once this aspect goes into effect in 2014, if you have more than 50 employees, you face new health care regulations, potential fines and changes. For example, if you have 51 employees and just one on your team uses a state insurance exchange, you will face a penalty of $3,000 for each employee in the exchange, or $2,000 for each full-time employee (FTE) excluding the first 30 workers ( $ penalty = Number of FTE – 30 X $2,000).