President Obama signed sweeping, controversial health care reform legislation that will dramatically increase labor costs for employers as NRF urged the Senate to reject House amendments to the new law that would drive costs even higher and further threaten retail jobs.

Obama signed H.R. 3590, the Patient Protection and Affordable Care Act — the health care bill narrowly passed along strict party lines by the Senate on Christmas Eve and given final approval by a narrow margin in the House — during a ceremony in the White House East Room.

“We have just enshrined the core principle that everybody should have some basic security when it comes to their health,” Obama said.

The Senate began deliberations on H.R. 4872, the Health Care and Education Affordability Reconciliation Act of 2010, a second measure passed by the House that would make changes to the Senate bill including larger financial penalties for companies that fail to provide health insurance to full-time workers.

“This is a good law,” Senate Majority Leader Harry Reid, D-Nev., said on the Senate floor. “We’re going to make it better.”

“We congratulate the President on his political achievement even as we continue to strongly oppose many of the key provisions,” National Retail Federation Foundation (NRF) Vice President and Employee Benefits Policy Counsel Neil Trautwein wrote on the NRF blog. “We just wish that he had signed the right health care reforms into law. The new law is a giant sideways step in the wrong direction.”

NRF Senior Vice President for Government Relations Steve Pfister said in a letter to senators that amendments to the newly signed law that would be made under the House bill would exacerbate NRF’s concerns about the lack of greater and more immediate savings for employer-sponsored health care coverage, penalties under the conditional employer mandate, and higher taxes that would be passed on to both employers and consumers.

“H.R. 4872 greatly increases employer penalties, a dangerous move in our view given that we found the Senate-passed mandate penalties unacceptable. H.R. 4872 also counts part-time employees in coverage threshold calculations — an approach that could ensnare small to mid-sized retailers,” Pfister said. “The problems in this bill far outweigh any positive measures contained within.”

With the new law and proposed amendments requiring employers to either provide health care coverage to full-time workers or pay hefty penalties for failing to do so, it is “an economic certainty” that retailers operating under razor-thin profit margins will be forced to reduce the size of their workforces or slow expansion plans, Pfister said.

“This is an outright tax on jobs, a dangerous strategy when our economy so clearly needs to grow through job creation,” Pfister said. “Health care reform in its current form will become the biggest anti-stimulus legislation imaginable.”

The new law imposes a penalty of $750 per full-time worker on companies with 50 or more employees that do not provide coverage to full-time workers. But the House reconciliation bill would increase that penalty to $2,000, with the first 30 workers exempted. If an employer offers coverage but the coverage is deemed unaffordable to a full-time employee, that employee can opt out to a new purchasing exchange. The company would then be assessed $3,000 for each of those employees up to a cap of $2,000 for every full-time worker on the payroll. The mandate becomes applicable in 2014.

Also, under the House bill, the 50-worker threshold would be calculated based on full-time equivalents, meaning part-time workers would be counted even though they would not be required to be offered insurance. The Senate bill counts only full-time workers.

In one positive provision in the House bill, employers would not be required to offer health benefits to full-time workers until they had been on the job 90 days. The Senate bill would set a penalty of $600 if insurance wasn’t offered after 60 days.

The House passed the amendments in a separate bill because a January special election left Senate Democrats one vote short of the 60 votes needed to overcome a Republican filibuster and pass the reform bill again. The amendments bill is being handled under “reconciliation” rules normally reserved for budget matters, which require only a simple majority of 51 votes for passage. The measure is nonetheless expected to be the subject of Republican amendments and points of order as it is debated over the next few days. Democrats say they have at least 52 votes for passage, but the Senate bill’s provisions will remain intact as law unless the House measure is passed.

For more information, contact NRF Vice President and Employee Benefits Policy Counsel Trautwein at (202) 626-8170.