NEW YORK With just nine
months before the Affordable Care Act comes into force and
requires all medium- and large-sized companies to provide
insurance for their employees, the steel industry is bracing
An informal poll of steelmakers
suggests that most companies will continue to offer their
current plans, but that could change as becomes more
complicated to provide insurance and perhaps more expensive.
There are plenty of questions about how the plan will be
enforced and what it will mean financially for companies in the
steel industry, from family owned distributors to the biggest
"Right now, its the
Were not quite sure how it's going to work
health-care act. ... Some things could be good; some things
could be bad. But we dont know how this is going to
work," Burke Byer, president and chief executive officer of
Cincinnati-based rebar mill and fabricator Byer Steel Corp.,
"There are guidelines, rules and
penalties that we need to be aware of," Walt Robertson,
president of Johnstown, Pa.-based Johnstown Wire Technologies
Inc., said. "The challenge is for us is to maneuver through the
Although the plans details
are complicated, companies with 50 to 200 full-time employees
generally must pay more than 60 percent of their
employees premiums, while those with 200 or more
full-time employees will have to cover more than 72.5 percent
of their employees individual health plans.
If health-care premiums rise
because of the act, steelmakers will be forced to swallow the
costs for their employees.
"The biggest issue is if the
company has more than 50 full-time employees and they do offer
insurance, they shouldnt be so concerned about the
coverage," consultant and columnist Gene Marks said to
steelmakers at the American Wire Producers Associations
annual meeting in February. Rather, they should be concerned
about the cost to the employees, which they would have to
cover, he added.
But some steelmakers might
simply ignore the law and refuse to pay for their
employees insurance, Marks said. Companies with more than
50 workers that dont offer insurance will be forced to
pay a $2,000 penalty per employee by 2019, with the first 30
employees exempta cost that some might judge on balance
"I think most employers are
going to wash their hands of this, pay the penalty and give
some type of compensation or allowance for employees to buy it
on their own," Marks said.
The choice has left steel
businesses conflicted: Do they keep their employees on
grandfathered plans, deal with the extra paperwork and risk
paying higher premiums, or swallow the penalty and send them
out to the state-based exchanges?
"You (either) have to compensate
your employees some amount to cover some gaps, and youre
also taking a paternalistic culture that weve had with
employer insurance, (or) youre pushing people out to the
wolves," Byer said.
Some sources said they would
continue to offer attractive plans despite the complications
and cost threats because they value retaining experienced and
skilled employees. "Its very hard to get technical people
in my industry. ... It takes five years to get one of them
productive," Dennis Stump, president of fabricator Akron Rebar
Co., Akron, Ohio, said. "Im under the magic number of 50
(employees), so logically I dont have to have my people
covered. But I couldnt retain them if I didnt."
Many sources also said they
wouldnt change the health-care plans they already
"(Our employees) dont need
the added stress of worrying about their families health.
The fact that the government mandates it is irrelevant," Stump
said. "Its reasonable to assume that your employer
Some of the biggest problems,
including the danger that premiums could weigh down company
finances, might not manifest themselves until later.
"(In the) short term, I think
(business owners) are going to continue to go with their own
existing plans," Marks said. "But (in the) long term, as the
plan becomes more refined and more complicated ... I think
youre going to see more employers opt out."