Some provisions of Obamacare are still being implemented and could drive costs higher in the future. For example, the so-called Cadillac tax on the most generous insurance plans takes effect in 2018.
Burrito Chain
For now, the additional costs of Obamacare are coming in the form of requirements to cover more workers. Chipotle Mexican Grill Inc. said this month that the cost of covering more than 1,000 employees who work 30 hours a week or more -- a key requirement of Obamacare -- will add as much as $8 million to health insurance expenses in 2015. That’s less than 1 percent of its projected operating profit for this year, based on the average estimate of analysts compiled by Bloomberg.
Walmart Stores Inc., the biggest U.S. employer, had bigger health-care costs this year than it anticipated, with more workers enrolling and costs rising faster than it expected, Greg Foran, chief executive officer of the company’s U.S. unit, said in August. The retailer estimated then that its health-care expenses would rise by about $500 million last year. That’s about 0.1 percent of its annual revenue, or 1.8 percent of operating profit.
“While enrollment was higher than anticipated, we are pleased our associates and their families continue to take advantage of our affordable health-care opportunities,” Foran said. Walmart spokesman Randy Hargrove did not respond to multiple requests for comment.
Nonfinancial Challenges
A smaller retailer, Casey’s General Stores Inc., said employee health-insurance enrollment climbed 19 percent for this year. That was partially because the company has been growing, Chief Financial Officer Bill Walljasper said in an e-mail. The higher enrollment will lead to an increase of as much as $6 million in health-care expenses, he said. That’s about 2 percent of annual operating profit.
For large employers, the biggest challenge from the law may have been reworking their benefits structure rather than any major financial impact, said Paul Fronstin, director of health research at the Washington-based Employee Benefit Research Institute, an industry group.
“They had to do the work to come into compliance; for a lot of employers, that was a big headache and a distraction,” he said in a telephone interview. “Maybe the effect wasn’t as large as what was originally anticipated, but there was an effect.”