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Local News

April 24, 2014

Tom Cole: Businesses may decide to drop health insurance

Ada — Companies may decide to stop providing health insurance for their employees instead of upgrading coverage to meet new federal standards, U.S. Rep. Tom Cole said Wednesday.

As it stands now, about 60 percent of the businesses that offer health insurance have plans that don’t satisfy the requirements set out in the Affordable Care Act, Cole said. He said when the so-called business mandate takes effect, businesses will have a major decision to make.

“Do we upgrade our plan, which means the business pays more and the employee pays more as their share?” he said. “Or do we just get out of this altogether and write a $2,000 fine for each employee to the federal government, which is a much easier thing to do?”

Cole said he thought many businesses would decide to pay the fine, drop their health coverage and tell workers to find a suitable plan on an insurance exchange. But he said companies that take that approach may risk losing their most valuable employees.

Cole, who is seeking re-election in November, spoke about the Affordable Care Act and the business mandate during a town hall meeting at the Ada Area Chamber of Commerce. He also stopped by the Ada News office for an interview in the afternoon.

The Affordable Care Act, also known as Obamacare, requires businesses with at least 50 full-time employees to provide health coverage or pay a fine of up to $2,000 per employee. The business mandate for companies with 50 to 99 full-time staffers was supposed to begin this year, but it has been delayed until 2016.

Companies with 100 or more full-time workers were originally supposed to offer coverage to 95 percent of their staff, but that rule has been tweaked as well. Under new rules announced in February, larger employers can avoid fines by offering insurance to 70 percent of their workers next year and increasing that number to 95 percent in 2016.

Small employers with fewer than 50 workers do not have to offer insurance, but they will be allowed to buy health plans through new insurance marketplaces. The federal small-business marketplace will open in the fall.

Business owners have told Cole that they are confused about Obamacare’s coverage requirements, and they have seen their deadlines moved back, he said.

“The first thing is, I think they want some certainty,” he said.

He said some business owners have said they are thinking of dropping health care coverage for their employees, but they need to determine how much upgraded plans would cost. Businesses would also look at whether they could responsibly shift more of the cost of coverage to their workers.

Cole also touched on the case for repealing Obamacare and other issues during his interview with the Ada News.

• Repealing Obamacare:  The troubled rollout of the federal government’s health insurance website, the delays in imposing the business mandate and other problems have strengthened the case for repealing Obamacare, Cole said.

“The administration likes to make the argument that it’s working and we’re just making adjustments,” he said. “I think some of it’s just like whistling past the graveyard. They just hope that people don’t look at it very carefully before the election.

“But there have been so many delays, so many changes. There’s so much diversity on a state basis as to what insurance commissioners do and won’t do, and what individual insurance companies are doing, that it does argue to delay it.”

Cole said he did not think efforts to repeal the law would prevail as long as Obama is in office.

• The Keystone XL pipeline: Cole criticized the State Department’s recent decision to extend indefinitely its review of the Keystone XL pipeline, saying it was “transparently political.”

“Clearly, the administration wants to keep kicking this can down the road,” he said. “They don’t want to have to make a decision.”

The 1,179-mile pipeline would carry oil from Canadian tar sands to refineries on the Texas Gulf Coast, The federal government must decide whether to approve the project because it crosses the Canadian border.

Supporters of the pipeline contend that it would create thousands of jobs and reduce reliance on foreign oil. But critics have challenged the argument that the pipeline would create many permanent jobs or have a substantial impact on the economy.

• Kerr Lab: Officials with the Environmental Protection Agency are moving closer to naming someone to take over the reins at Robert S. Kerr Environmental Research Center, Cole said.

“I think we’re making progress, but we’re not there yet,” he said.

He said the director’s chair has been vacant for several years, which affects the lab’s ability to function and harms its ability to secure federal funding.

EDITOR’S NOTE: The Associated Press contributed to this report.

Reach Eric Swanson at adanewsreporter@cableone.net.

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