Natural Foods Merchandiser

How will health care reform hit retailers in the pocketbook?

Now that the Obama Administration’s health care reform bill has been signed into law, industry insiders are scrambling to determine exactly what it will mean—and what it will cost—for businesses in the natural products industry.

The National Retail Foundation, based in Washington, D.C., has already issued a press release explaingin the “new costs and mandates” under the bill.

“We’ll certainly work to implement the new law as effectively as possible,” said Neil Trautwein, vice president of NRF. “But don’t ask us to celebrate this policy, because it really failed to deliver what we sought for reform, which was more affordable care and coverage.”

Provisions of the bill begin to kick in this fall, with the most important slated for implementation in 2013 and 2014. The good news for small retailers and manufacturers is that insurance requirements only affect companies with 50 or more employees. Larger companies who do not provide coverage will face fines of $2,000 annually per employee. In addition, if offered coverage is deemed “unaffordable” to workers, companies will be required to pay $3,000 per worker who enrolls in an insurance exchange. In addition, Medicare taxes for high-income workers will increase in 2012.

“I think it’s concerning for everyone,” said Daniel Fabricant, vice president of scientific and regulatory affairs for the Natural Products Association, based in Washington, D.C. “By and large, the insurance requirements won’t be a huge concern for smaller retailers, though the potential for impact is there for manufacturers.

He saw some other positives in the bill, as well as some negatives. “There’s room for more focus on alternative and complementry medicine, as well as a look at supplements and prevention,” Fabricant said. “But the tax exception for OTCs under flex spending accounts will be eliminated, which doesn’t look good for supplements to receive the same benefit. We’re still figuring it out.”

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