Report: Impact of healthcare reform mixed for retail industry
New York City The impact of the recently passed healthcare reform bill will be mixed for the retail industry and subdued in the near-term since the bulk of the coverage requirements do not kick in until 2014, according to Morgan Stanley & Co., which has issued a report entitled “Retail: What Healthcare Reform Means for Retail.”
“While we do expect increased costs for the industry going forward, the degree and timing remains unclear as the industry begins to assess its options for delivering healthcare to its employees under the new legislation,” the report said.
“Most importantly, we believe the impact/ cost of the bill on wage growth and job creation across the United States is most critical, as employment is the key driver of consumer spending and overall retail sales,” the report said.
On Monday, Morgan Stanley hosted a call on the report. The participants included Sarah Arbes, VP, government affairs, Retail Industry Leaders Association and Kim Monk, managing director, Capital Alpha Partners. Monk outlined a partial timeline for the law's implementation:
2010: Small businesses with up to 25 workers will get tax credits to help provide coverage; Health insurers will be required to maintain dependent coverage for children up to 26 years old.
2011: Employers will be required to report the value of existing healthcare benefits on W-2 forms.
2013: Flexible spending accounts, or FSAs, will be capped at $2,500 a year; Medicare payroll taxes on couples making more than $250,000 and individuals earning more than $200,000 will be raised.
2014: Employer and individual mandates kick in; insurers prohibited from denying coverage to individuals with pre-existing medical problems; states create new health-insurance exchanges.
2018: Tax imposed on high-cost "Cadillac" healthcare plans.