While Republican attempts to repeal President Obamaâs health insurance reforms and Supreme Court challenges about the lawâs constitutionality may lie ahead, produce shippers are joining a growing list of companies exempt from some of the new rules.
More than 220 U.S. employers and insurance providers, including Western Growers Assurance Trust, A. Duda and Sons, Club Chef LLC, Fresh Express, Sun World International, Wada Farms Inc., Boskovich Farms Inc. and Fowler Packing Co. received one-year waivers from a requirement of a $750,000 cap minimum on health care benefits in 2011.
Jon Alexander, compliance counsel with Irvine, Calif.-based Western Growers, said many existing plans in the retail and agriculture industry a cap of annual benefits from $10,000 to $250,000.
The Department of Health and Human Services grants waivers if a companyâs employees would lose health insurance or face prohibitive increase in premiums if health care benefits were adjusted to meet the waiver.
âWe had companies facing 150% increases in premiums,â said Cathy Enright, Washington, D.C.-based vice president of government affairs for Irvine, Calif.-based Western Growers and leader of a National Council of Agricultural Employers working group.
Western Growers offers health benefit plans to agricultural operators in California, Arizona and Texas, primarily shippers, growers and packers of fresh produce. About 1,200 employers participate in Western Growers insurance plans.
Before Congress passed the health insurance law, there was no minimum cap on heath insurance coverage. The $750,000 cap minimum in 2011 is a transition to 2014, when no dollar minimum cap will be allowed for health insurance.
More than 220 companies employing over 1.5 million workers were granted waivers through Dec. 16. The waiver will be issued on a year to year basis until 2014, when all policies must have no cap on benefits. Cost explosion feared
Only 10% of the 1.6 million agricultural employees have health benefits now, according to Western Growers, and employers are bracing for more regulations and increased costs when employer mandates kick in 2014, Enright said.
âIn general, the government proposals for how to deliver health care basically blow the economics of farming out of the water,â said Frank Gasperini, executive vice president of the Washington, D.C.-based National Council of Agricultural Employers. âOur fear is that this will further contribute to pushing production offshore.â
Whatâs more, state-run insurance exchanges called for by the health care law wouldnât do a good job of meeting the needs of farmworkers, he said, who often travel state to state as they follow fruit and vegetable harvests.
Another thorny question is how illegal immigrants will fare under the health care law. Illegal immigrants wonât be provided subsidies to help them purchase insurance, Enright said. Gasperini said between 50% and 80% of agricultural workers may lack proper documentation to qualify for health insurance subsidies.
Industry leaders say it is unclear if workers under the H-2A guest worker program will be covered under the governmentâs health insurance law.
Growers and other agricultural employers are talking with Health and Human Service officials to talk about possible health care concepts and models that will work for agricultural workers, Enright said.
â(HHS) understands the programs they are putting in place are not going to be a good fit for the specialty crop industry, and they are willing to discuss concepts and models,â she said.
Because the health care model is based on state-based exchanges, Enright said, the industry wonders if a national agricultural health cooperative could better fit the needs of a seasonal workforce. She said that HHS officials at least seem open to listening to possible concepts that could work for agriculture.
Gasperini speculated that HHS could issue new proposed health care regulations on seasonal farm workers sometime next spring.
âTheir dilemma is how to comply with the law as written and how to do it in a way that actually works,â he said.
The law states that by 2014 employers with more than 50 full-time employees (employees who work more than 120 days per year) must provide health insurance to their workers or the face the possibility of fines of as much as $2,000 per employee.
It will be revolutionary to the specialty crop industry to go from providing insurance to only 10% of its employees to in 2014 being required to offer health insurance to all employees or face fines, Enright said.
Despite the complexities of trying to mesh agricultural workers with new health insurance rules, Enright said it may be wishful thinking to believe Congress will be motivated to work on comprehensive immigration reform.