Steamboat Springs Steamboat Ski Area officials said Tuesday that the federal health care overhaul could cost their business as much as $2 million a year beginning in 2014.
The health care overhaul includes a policy that would assess a fine, per employee, to large businesses that do not provide health care to full-time workers. The policy’s potential impact is ringing alarm bells with the Colorado ski industry, which has a large number of uninsured seasonal employees who work enough days to qualify as full-time workers.
“The potential impact to Colorado Ski Country member areas is somewhere between $9 million and $14 million in penalties (per year),” Steamboat Ski and Resort Corp. President Chris Diamond said Tuesday, citing a Colorado Ski Country USA estimate. “It’s a stunning blow to any large employer like ours that employs seasonal staff.”
Colorado Ski Country is the trade association for 22 Colorado ski and snowboard resorts. Spokeswoman Jennifer Rudolph cautioned Tuesday that association staff still is digesting the impacts of the multi-faceted health care legislation, which includes numerous tax credits and penalties for businesses of varying sizes. But Rudolph said the association is very much aware of the employer penalty policy.
“That is something that has raised a red flag with us, and we do have some concerns as representatives of employers,” Rudolph said. “We do have folks on our staff who work closely with legislators and policy makers and have been paying very close attention to the health care bill.”
Two members of Colorado’s Congressional delegation, U.S. Rep. John Salazar and U.S. Sen. Mark Udall, said Tuesday that they plan to work with the state’s ski industry to address its concerns. No specifics were given.
President Barack Obama signed the Patient Protection and Affordable Care Act into law Tuesday. A smaller companion bill, the Health Care & Education Affordability Reconciliation Act, is pending passage by the U.S. Senate and would modify the larger bill. Together, the two bills include a policy that requires businesses with more than 50 full-time employees to provide health insurance, or a percentage of its costs, to each full-time employee. Failure to do so when the policy takes effect in 2014 would result in the per-employee fine.
The policy would charge Steamboat Ski and Resort Corp. $2,000 for each seasonal employee who works more than 120 days — thus considered full-time — and who is not provided health insurance.
Ski Corp. has about 1,000 seasonal employees.
“That’s a $2 million cost to us on an annual basis, where all of a sudden our expenses just increase,” said Laurie Good, Ski Corp.’s vice president of financial services. “If we have to foot the bill for $2 million … that’s really going to hurt our business model.”
The actual fine could total less than $2 million annually. The policy exempts the first 30 employees from the fine assessment, and Ski Corp. spokesman Mike Lane said Ski Corp. provides health insurance to seasonal employees in their third year and beyond.
A breakdown of seasonal employees’ longevity was not available Tuesday.
Diamond said he learned about the employer penalty policy about a week ago, from Colorado Ski Country. He strongly criticized western Colorado’s representation in Congress for not blocking the policy.
“It was so tough to get any handle on what was actually going to be in the bill,” Diamond said about the weeks leading up to its passage. “I’m terribly disappointed that anybody representing constituents like us would have let this pass through — it’s beyond understanding.”
Salazar’s staff said Tuesday that they are working with ski areas and other members of Colorado’s Congressional delegation to address the policy and its impacts. Udall said the same.
“I appreciate the challenges that any business faces in providing health coverage to their employees. I think it is vital that we make providing health coverage as feasible and affordable as possible,” Udall said Tuesday. “While nearing the end of this current debate, I recognize the unique seasonal work force needs of ski areas and am committed to working with them and the (presidential) administration to make sure ski areas are not put at a disadvantage compared to other employers.”
The policy’s final language is pending passage of the reconciliation bill.
Lane said Ski Corp. used to offer health care to seasonal employees in their first year, but has not done so for several years.
Good noted that Ski Corp. “employees have been at a wage freeze for two years.”
The employer penalty policy could add to the burden of ski resorts struggling in the economic recession.
“It’s certainly a very big cause for concern for the Colorado ski industry,” Good said.