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What Obamacare Will Mean for Bay Area Retailers

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In less than six months, the Affordable Care Act (aka Obamacare) will take effect, changing employers' requirements for providing (or subsidizing) healthcare for employees. Locally, the Mayor's office is keeping mum on the specifics, but it's looking certain that employers will pay more come January 1, 2014, than they're currently paying under the San Francisco Health Care Security Ordinance.

In general, the SF Ordinance requires retailers to pay a certain amount toward employees' healthcare based on the hours worked by the employee. For example, the expenditure rate for large employers (with 100 or more employees worldwide) is $2.33 per hour, and for medium-size employers (20 to 99 employees), $1.55 per hour. Under the Federal Act, the rates will increase to $2.44 for the large and to $1.63 for the medium. Next year, the rates will increase under the SF ordinance to $2.44 for the large companies and to $1.63 for the medium. But under the ACA, these rates won't be available since the Federal requirement will, in effect, block the use of the SF program that allows for these rates. Bottom line: employers must expect to pay more.

To off-set the current SF Ordinance, restaurants across the city have tacked on a "Healthy SF" surcharge in direct opposition to raising menu prices, a practice that may continue next year under the new Act. But for retailers, this added-on charge would be less feasible with customers balking at the extra cost (conspicuously sitting below the tax line) and easily walking away (no full tummies to fuel a guilty conscience). And with consumers using smartphones and ecommerce as the measure for competitive pricing, raising the sticker price may also cause lost transactions. But thankfully, with implementation across the country, the playing field will become somewhat even. And who knows, maybe Healthy SF will become Healthy U.S.
·Retail detail: the Affordable Care Act makes retailers' compliance with San Francisco health care law a bit more complicated [Lexology]
·Fight brews over mandates under HealthySF law [San Francisco Examiner]