As in financial markets, when major change takes place within industries, people deal well with “good news” and they deal well with “bad news.” They seldom know what action to take with “uncertain news.” Thus, people hunker down. It’s human behavior. The Affordable Care Act (or Obama Care if you prefer), has raised that specter of uncertainty. There is little reason to be either more optimistic or more pessimistic about the ACA today than there was 6 months ago. The polls point to people being more pessimistic. Retailers will act out of their best interests. On average, we’ll see about the same number of full time and part time employees in the mix. Retailers should run their businesses as they see fit. It will be essential that they communicate, communicate, communicate on the direction they are taking. Keeping trust and confidence within their systems will be critical. This will be a difficult period for organizations that have large employee bases. There will continue to be a great deal of finger pointing from the White House… Read more »

I am less optimistic and I wasn’t hopeful to begin with. Why? Our clients tend to be smaller retailers. In order to be free from the ACA penalties they need to meet a criteria the includes having a percentage of their eligible employees want to participate in insurance and making sure the employees’ portion of the insurance cost do not exceed a percentage of their wages. In one recent case the employer was paying up to 68% of the insurance. The result was a more than $1,600 per employee over the cost of just paying the penalty. Even with that subsidy, the majority of employees elected not to take insurance because it cost too much. This in turn means fewer insurers are interested in providing plans, which in turn means less competition which results in higher insurance costs. I expect this will eventually mean more and more retailers will opt not to provide insurance. The net impact on retail employees’ satisfaction will depend on whether the high initial cost being reported by the press on… Read more »

After all the hysteria subsides, we’re all going to find that the assumption we had before – that having health insurance is a good thing – was right all along. The ACA story is going to have a happy ending.

In the media will hear about the 29ers and 49ers – people who had their hours cut to 29 or small businesses that can’t expand and must keep their business with less than 50 employees. A sad reality, but most likely a small percentage. I think those situations will become overblown for the sake of entertainment. My advice would be for employees that are non-essential, provide a subsidy and have them purchase their own insurance. For the rainmakers, businesses will need to provide more than just health insurance, they will need to make sure their best employees and their families have the option of getting unrestricted access to the healthcare. It’s hard to tell how its going to shake out. There have been delays in implementing ACA and businesses are locking into plans that take affect before January 1. This is a moving target and we will continue to see new and creative ways for businesses to find loopholes to take advantage of. Some politicians are telling us not to worry, they will make ACA… Read more »

Zero optimism.

There is a chasm between what any given retailer may say publicly at this point and how they will actually behave when their hands are forced.

How wide that chasm will be is yet to be determined.

Obama Care (or any other intrusive government mandated regulation) is not going to create jobs in retailing or positively impact the industry. The extent of the damage it will create is a question that will be quantitatively answered by economists in 5 to 10 years.

It’s difficult to be more optimistic about ACA right now, given the web site difficulties on the consumer side. That said, in the end, retailers must provide the appropriate level of staffing and customer service to meet the needs of the shoppers. Retailers that cut too many corners in order to save on healthcare costs may regret the short-term decision that may negatively impact longer-term customer service and employee satisfaction.

Business in general will view the ACA and its requirements as an opportunity to gradually exit the role of health insurance provider for most, if not all employees. Whether this will turn out to be a good thing, bending the health care cost curve and providing more affordable access for more people, remains to be seen. Retailers will drive this change at a higher rate than some other businesses, only because of the nature of their work force. They will be joined by quick service restaurants, landscaping and janitorial services, and anyone else who employs primarily variable labor. I can see only two “certainties” in the ACA. The first is that access to the broad network of health care services the insured have enjoyed up until now will go down – or the cost of that access will go up dramatically in the form of concierge medicine. The second is that the cost of providing universal health care for everyone in the U.S. has now shifted from an unofficial “higher cost for those who can… Read more »

Neither less or more optimistic. The upside is clarity so that decisions can be made.

Few retailers can absorb additional costs. Even fewer will admit to the obvious decisions they’ll make necessitated by ACA.

In the end, it won’t turn out well for employees.

As I was quoted in the article, “In the end, the economics are such that all employers will want out of health insurance; they just haven’t found a way.”

As long as labor is such an integral part of retail, it is to the benefit of both the companies and the workers to get out of company sponsored plans. When a company gets out of purchasing health insurance and gives or shares the savings with their employees…

1. People get to choose the healthcare options that best meets their needs, not have some employer choose it for them.

2. Health insurance companies have to compete to get their participants, whether on price or services and if the participants don’t like it they can change.

3. Companies don’t have to pay for an expense that is not core to their business.

There was an article in the NY Times last week how one employer is doing just that.

Net, net, the faster employers drop company sponsored health insurance, the better off both the companies and the employees will be.

Anyone who owns a business as I do will not be more optimistic for next year. The government, outside of the military, can not manage a lemonade stand,without regulating it out of business, and we are supposed to believe that our health care coverage will get better and cheaper?

These are difficult times for store owners, as we are facing ever increasing costs of doing business, without the luxury of growth, so hold on to your safety deposit boxes, as it is going to get very interesting for us in the trenches.

Add into the mix consumers who are unwilling to part with their dollars, unless they get it for half off, and it is the perfect storm for a jolly happy 2014. Hang in there fellow retailers, and Merry Christmas.

The sticker shock and higher deductibles that are hitting Americans and retail consumers with respect to the out of pocket costs of their new ACA policies (the ones who have even been able to sign up yet) should scare retailers mightily. Bottom line: American families are going to have a lot less disposable income to spend in stores and online over the immediate future. There have been a few stories written about this, but it is a major and under reported issue in my opinion.

Be careful not to interpret Walmart’s apparent embracement of the AKA as either an endorsement of the plan or its ultimate impact on retail in general. Walmart is in a unique situation when it comes to employee insurance as they have been under the critical eye of many in the industry of not providing good or excellent benefits to their employees. With that said, the prospect of many of their competitors feeling compelled to dump their employees into the exchanges (with subsidies in hand), Walmart could find themselves in a better, (not worse) position in terms of the competitive package they offer both full time and part time employees vis-a-vis their competitors. But let’s face facts. The AKA is so complicated, so mismanaged, and its future, so uncertain, it is truly anyone’s guess whether it will be a boon, a disaster, or a non-event over the next few years. Based upon its dubious launch, my guess is the worst is yet to come in terms of dropped policies, confused and disgruntled policy holders and insurance… Read more »

The ACA will implode in 2014 for reasons that are just now emerging. Not enough Millennials will sign up and too many doctors and hospitals will not participate. It will be an unhappy ending for retail and everybody else.

I am less optimistic that Obamacare will have anything but negative impact on retailers and this will really be seen late next year. Let’s look at the impact Obamacare is having today. A majority of new jobs are part time, not full time due to the added cost. Five million more people are without health insurance since when enrollment started. Next year it is projected that 80 million will lose their health insurance as employers drop it as a benefit. Millions have lost their Medicare supplement insurance as major companies drop this benefit for retires. Cost will not be coming down any time soon until there is tort reform and getting fraud out of government-run programs. It is now accepted that tax dollars will be paid to the insurance companies due the policy mix not being what they expected. Large retailers will adjust their policies and provide for their employees. Small retailers will either drop their policy or pay employees a fixed fee to offset the cost. What will fall through the cracks is the… Read more »