Obama Win Assures Survival of Health Care Reform

Original Article  American Staffing Association (11/07/12) Ed Lenz


President Obama's decisive victory in the 2012 presidential election means that few, if any, major policy shifts are likely to occur in the next four years. A key question is whether the federal government can produce any significant accomplishments during that time. This will largely depend on whether the president can forge a consensus with Republicans in Congress following one of the most contentious political campaigns in recent memory.

An immediate test for all parties will be to address the daunting economic and political challenges presented by the "fiscal cliff," which calls for automatic steep tax increases and across-the-board spending cuts beginning Jan. 1, 2013, unless a compromise is reached. If the issues can't be resolved in the upcoming lame duck session of Congress, they surely will dominate the legislative agenda in the early months of the president's second term.

Although Republicans had expected to gain seats in the Senate, perhaps even regain the majority, they may actually lose ground. Republicans picked up a seat in Nebraska but lost seats previously held in Indiana, Maine, and Massachusetts which would mean a net loss of two seats unless Democrats lose in Montana and North Dakota. The Democratic candidates were leading in those states as of Tuesday night, but the races were still too close to call. If they hold those seats, Democrats will control the Senate by a margin of 55 to 45, including independents Bernie Sanders of Vermont who always votes with the Democrats and newly elected Angus King of Maine who is expected to do so. However, Republicans maintained their majority in the House, which means that congressional gridlock looms, on the fiscal cliff and other issues, unless lawmakers can find a way to bridge their differences. Given the dire economic consequences of failure, compromise is likely—but the precise contours of an agreement are impossible to predict.

One thing is clear: Implementation of the Affordable Care Act will move forward. For employers, this means that, effective Jan. 1, 2014, they will have to either offer qualified health insurance to their full-time employees or pay penalties if even one employee receives government assistance to buy health coverage through a state health exchange. Fortunately, ASA and its coalition allies were successful in persuading the Obama administration to allow employers with "variable hour" employees to use a "look-back" period of up to 12 months to determine whether those employees have worked full-time for purposes of offering health coverage or paying penalties. The look-back is expected to substantially reduce staffing firms' exposure to penalties for their temporary employees.

Although the nation's attention has been riveted by the presidential and congressional races, key elections held across the country at the state level could significantly affect businesses. Most of the adverse legislation aimed at staffing firms, historically, has come from the states. ASA will examine the implications of those elections and will report on the regulatory challenges they could present for the staffing industry in 2013 and beyond.