Obamacare may hurt tree fruit growers, experts say
WENATCHEE, Wash. — Obamacare may be one more regulatory burden that forces mid-size tree fruit operators in Central Washington out of business, says the leader of an industry trade organization.
Calculating full-time-equivalent employees is complicated and employers can be sued by employees if they improperly decide not to provide insurance, said Bruce Grim, executive director of the Washington State Horticultural Association.
“It’s one more reason growers with 50 employees and above will say it’s just not worth it,” Grim said.
Peter Spadoni and Lindsey Wehmeyer, tax attorneys at the Wenatchee law firm of Jeffers, Danielson, Sonn & Aylward, who specialize in agricultural clients, tried to explain Obamacare at a session of the Horticultural Association’s annual meeting, Dec. 3.
They outlined numerous caveats in the counting of employees and positions — regular and seasonal and repeat seasonal— that go into calculating full-time-equivalent (FTE) employees.
“Hell, I’m an attorney and I’m not sure I understand,” Grim said later. “So the average grower is just as confused as I am.”
Companies with fewer than 50 FTE don’t have to provide insurance. Companies with 50 to 300 FTE may find it cheaper to pay federal penalties of $2,000 per employee than provide insurance, but companies with more than 300 FTE likely will find insurance cheaper, Spadoni and Wehmeyer said.
“What concerns me is the rules calculating FTEs are such that it will be easy for employers to make good-faith mistakes,” Grim said. “Given the employee’s right to sue employers, I fear we will see a ream of lawsuits that will be costly for employers to defend.”
The cost of defending lawsuits could be a bigger burden than Obamacare itself, he said.
“This is daunting for a lot of folks,” said Grim, who owns an orchard. “Paperwork is not why most of us got into the orchard business.”
Some employers are cutting employee hours to make sure they have fewer than 50 FTE, but it is difficult for tree fruit growers and packers to do that because they have a hard time finding skilled workers, Grim said.
Growers are almost numb to an ever-expanding array of regulations that make their lives tougher, he said. Obamacare is just the latest on top of many others including food safety regulations, attempts at spray drift notification and an ever upward state minimum wage, he said.
Buell Hawkins, owner of Valley Tractor & Rental, East Wenatchee, and a former Chelan County commissioner, said he has fewer than 50 employees and will continue providing health insurance for them despite a higher premium and new tax because of Obamacare. Coverage is extremely important to many who have been with him a long time, he said.
Obamacare will be tough on a lot of mid-size tree fruit employers, he said, who are still confused but likely to opt for penalties than providing insurance.