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U.S. Chamber of Commerce Backs Down on Obamacare (Sort Of)

U.S. Chamber president Tom Donahue gives up his fight to repeal the President's health care law--but vows to continue working to make parts of Obamacare less onerous for businesses.
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In January 2011, Tom Donahue, president of the politically conservative U.S. Chamber of Commerce, called for the repeal of Obamacare in his annual State of American Business address. The new health care law, said Donahue, was “unworkable.” Three years later, in a speech delivered on January 8, 2014, Donahue said, essentially, “We'll work with it.”
 
“The administration is obviously committed to keeping the law in place, so the Chamber’s not out opposing it,” Donahue said in his remarks this week. Instead, Donahue vowed to continue “working pragmatically to fix those parts of Obamacare that can be fixed while doing everything possible to make regulations and mandates as manageable as possible for business.”

Pushing for Tweaks
To be clear, this is a Nixon-going-to-China moment. But it’s not as if the Chamber is just rolling over. The group, which represents more than 3 million member businesses, is still calling for some pretty big concessions. Specifically, the Chamber says it will work to further delay, change, or repeal the employer mandate; to get rid of some Obamacare-related taxes that some employers consider onerous; and to give companies and their employees greater flexibility in their health coverage options.
 
Outright repeal of the employer mandate--already delayed one year until January 2015--is unlikely. Acknowledging that, the Chamber’s executive director, Katie Mahoney, suggested the Chamber might be satisfied with some tweaks: defining full-time employees--who must be offered health coverage by large employers starting next year--as those working 40 hours or more a week, arguably a more common definition than the law’s current 30-hour-per-week standard. Mahoney also called on the administration to simplify the calculation that businesses will use to determine if they are affected by the mandate, a particularly complicated piece of the law that requires employers to carefully track employee hours to get a total count of “full-time equivalents.”
 
Zeroing in on Taxes and Fees
On the tax front, the Chamber seeks the repeal of a health insurance providers fee, which will collect $8 billion from health insurers in 2014 to help fund insurance subsidies for low-income families and individuals. The amount to be collected is scheduled to increase annually, with no expiration date, and is expected to increase premiums by 2 percent to 3 percent when fully implemented, raising the average cost of family coverage by $530 in the small group market, and $550 in the large group market, according to one analysis. (Self-insured plans aren’t subject to the fee.)
 
Another tax Obamacare’s critics love to hate is the “transitional reinsurance fee,” an annual charge of $63 assessed on each person enrolled in a health plan for the next three years. The money collected will go into a fund used to reimburse insurers in the individual market in cases where a user’s claims exceed a given cost cap. Self-insured employers (with some exceptions) must pay the fee directly for their covered employees; employers with fully insured health plans will see the charge reflected in higher premiums. The Chamber of Commerce would like the government to explore different ways to finance this fund, making it less onerous for employers.
 
Whether you’re outraged or only mildly annoyed by this governmental nickel-and-diming, the fact that an opponent as powerful and well-heeled as the U.S. Chamber of Commerce is finally accepting Obamacare as a more-or-less-permanent part of the business landscape suggests that entrepreneurs will soon be forced to do the same.

IMAGE: Getty
Last updated: Jan 10, 2014

ADAM BLUESTEIN

Adam Bluestein is a frequent contributor to Inc., writing about health care, innovation, and new technology. He lives with his wife and two children in Burlington, Vermont.




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