(From the July 9, 2012, issue of Rubber & Plastics News)
AKRON—How the Supreme Court-upheld health-care reform ruling will affect the rubber industry remains something of a mystery.
Most of the provisions of the Patient Protection and Affordable Care Act that will directly impact the rubber industry haven't kicked in yet. Two that are of special interest to many in this business are an excise tax on medical devices and the mandate that all companies with 50 or more employees offer a certain level of health insurance to their employees.
The 2.3 percent excise tax on medical devices begins next year. Manufacturers and their lobbies have been complaining loudly about this one since it was proposed.
The tax is expected to generate more than $20 billion over the next decade to help pay for the $940 billion overall cost of the new law.
Elastomers mostly are components used within medical devices. The medical sector is one of the fastest-growing areas for the rubber industry, and if the gloom and doom prophecies of the device manufacturers come true, their subcontractors could be hurt. Or the tax will merely be passed onto consumers, or imposed on the subcontractors. Or both.
The insurance mandate for companies with 50 or more employees could have a much larger effect on the industry.
While major tire and non-tire manufacturers typically employ hundreds of workers—and already have health-care programs—perhaps half the industry is made up of smaller shops. Many of these are under-50-employee operations, while many have more than that number.
If the 50-plus rubber firms don't offer health insurance, or don't meet the new criteria of coverage, they face some hard choices. Either way, paying a $2,000 fine per employee for not providing enough coverage, or bumping up existing coverage to be in compliance, is an unwelcome expense.
How much will these and other provisions affect the industry? In this supercharged political atmosphere, where propaganda and pundits run wild, the truth is elusive.
Only a couple of predictions can be stated without fear of contradiction: If President Obama is re-elected, the health-care law will remain in place; and if that happens, it will affect all Americans, including every person who works in the rubber industry.