Tribes are Large Employers & Those Employees Make the Best Customers

So here is something cool: Google three words – tribes largest employers – and dozens of entities pop right up. This is our generation’s success story because across the country, in communities large and small, tribal governments and enterprises are writing lots and lots of paychecks. Tribes are big business.

An Idaho economic impact report summed up this sort of progress well. An economist said: “The study confirms what tribal planners already know – the tribes are rapidly growing, significant engines in the state.”

But that progress takes on a different context in the age of the Affordable Care Act. Tribes are employers. And that means there is a long “to do list” in order to meet the requirements under the healthcare reform law. If a tribe employs more than 50 workers, then insurance has to be offered that meets the requirements of the law and costs the employee less than 9.5 percent of their annual income. (Laura Bird and Jim Roberts of the Northwest Portland Area Indian Health Board wrote an excellent summary of the requirements.)

It’s important to remember that most Americans, including American Indians and Alaska Natives, get their health insurance through work. (I’ve written this before and will add again, this is uniquely American and dumb. We should not tie our jobs to our health care. But that’s where we are at.)

Right now most of the employer provisions are on hold. The Obama administration gave large employers more flexibility on insurance rules and delayed the implementation for mid-size employers until 2016. That means tribes will have more time to get ready. A good thing, too. Once all of the employer provisions begin, the penalty for being wrong could cost tribes some $2,000 per employee.

However Mark J. Mazur, assistant Treasury secretary for tax policy, wrote that the delay “will allow us to consider ways to simplify the new reporting requirements consistent with the law. Second, it will provide time to adapt health coverage and reporting systems while employers are moving toward making health coverage affordable and accessible for their employees.”

Critics of the Affordable Care Act are not happy about these changes, saying it’s more evidence the law does not work. The administration, however, is trying to make certain there are no more major glitches (such as the website) and this is a logical delay.

Another twist that impacts Indian country is that a major retailer, Target, is ending its insurance options for part-time employers because the workers would likely get a better deal through the exchanges (including tax subsidies). I suspect this would be the same for tribes and tribal enterprises.

The whole question of employment under the Affordable Care Act has taken on a new dimension with the recent report by the Congressional Budget Office. Republican opponents of the law cited this report as proof that some 2.5 million people will lose their jobs as a result. The CBO this week refuted that. The idea the CBO tried to measure was that many people would quit working because they had more choices.

The back and forth from CBO is great. “Q: Will 2.5 Million People Lose Their Jobs in 2024 Because of the ACA? A: No, we would not describe our estimates in that way.”

But, CBO points out, “there is a broader question as to whether the society and the economy will be better off as a result of those choices being made available,” a February 10 blog post from director Doug Elmendorf said. “Even though the individuals making decisions to work less presumably feel that they will be happier as a result of those decisions, total employment, investment, output, and tax revenue will be smaller. (Those effects are included in CBO’s budget and economic projections under current law.) To be sure, the health insurance system in place prior to the ACA generated its own distortions to people’s work decisions, but many of the decisions to work less under the ACA will be made possible by government-funded subsidies, the burden of which will be borne largely by other people … Hence, whether voluntary reductions in hours worked owing to the ACA are good or bad for the country as a whole is a matter of judgment.”

I think this particular debate misses an important point. The Affordable Care Act will free independent operators because it was too expensive to buy single policies on the open market. Over time my guess is that more people will launch a new business because health insurance won’t be a factor. It will be available and affordable.

But that brings us back to the political loop. Those that opposed the Affordable Care Act remain against it. And vice versa. Nothing in the news this week resolves the deep divisions.

Of course tribes and tribal enterprises – large employers, these days – now have a new means to contribute resources to the Indian health system. Fully-insured tribal employees will be a net asset every time they show up at an IHS, nonprofit or tribally-managed clinic or hospital. Tribal employees will be the prime customer.

Mark Trahant is the 20th Atwood Chair at the University of Alaska Anchorage. He is a journalist, speaker and Twitter poet and is a member of The Shoshone-Bannock Tribes. Comment on Facebook at: www.facebook.com/TrahantReports.

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Tribes are Large Employers & Those Employees Make the Best Customers

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