Obamacare Supporters Question Value of Employer Mandate

Wednesday, 04 Jun 2014 04:04 PM

By Joe Battaglia

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Obamacare's provision designed to incentivize employers to offer health coverage to their workers is actually discouraging hiring practices and has even led some of its supporters to question whether it makes sense or should be scrapped.

The employer mandate of the Affordable Care Act was meant to encourage businesses to offer their employees healthcare coverage by threatening a $2,000 fine for every full-time worker not afforded the opportunity to enroll for insurance.

The White House delayed by one year the implementation of the employer mandate, citing administrative difficulties in setting up the new regulation, but the viability of the policy remains up for debate.

According to a paper by the liberal think tank Urban Institute, eliminating the employer mandate would reduce insurance coverage by just 0.07 percent.

Washington & Lee University law professor Timothy Jost wrote in his blog for the journal "Health Affairs" that the current employer mandate should be replaced.

"I've been following the implementation regulations all along," Jost told Vox.com.

"One thing that has struck me over and over again is how incredibly complicated the employer mandate is. The reporting requirements, the determining who is a large employer, who is small, who is full-time and part-time is all a pretty burdensome operation, and I think the Urban Institute paper really raises the question of is it worth the effort? What are we getting out of all the time and resources being invested in this?"

Jost said repealing the employer mandate would lead to a decline in the overall number of people insured as well as a loss in revenue, and instead the government should explore alternatives. He advocates the House version of healthcare reform, which would require companies to commit a certain percentage of their payroll to health benefits rather than tether fines to each worker not insured.

"It would require companies, as I understand it, to spend 8 percent of their payroll on health benefits," Jost said. "For smaller companies, it would be a smaller percentage. It was a graduated thing, that if your payroll was under a half-million dollars, or some benchmark, you would pay a smaller percentage.

"I don't know if that's the right percent. But it's just a much simpler thing to administer with some very basic requirements, and it would get rid of the problem of people trying to evade the regulations."

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