Skip to comments.Senate eyes 25-employee threshold for health mandate
Posted on 07/13/2009 8:37:15 AM PDT by RightFighter
Businesses with 25 employees or more would be required to offer health insurance or pay $750 a year per full-time worker to the federal government, under health care reform legislation being considered in the Senate.
A "play or pay" employer mandate has been looming for months, but Democrats on the Senate Health, Education, Labor and Pensions Committee finally defined how small a business would need to be in order to be exempted from the requirement.
Most business groups oppose requiring employers to provide health care or pay a fee to the government, even if there is an exemption for small businesses. They contend it would kill jobs and hurt businesses that are struggling to survive in a tough economy. Plus, they say the mandate would do nothing to address health care's underlying problem: It costs too much. Reduce the price of health insurance, they argue, and more businesses would provide it.
Employer responsibility under Senate legislation Employers who don't offer coverage to full-time workers would be assessed $750 a year for each employee Employers who don't offer coverage to part-time workers would be assessed $375 a year for each employee Employers must pay at least 60 percent of their employees' premiums to avoid the assessment Firms with fewer than 25 employees would be exempt from the assessment Source: Senate Health, Education, Labor and Pensions Committee
Lynn Schurman, owner of Cold Spring Bakery in Cold Spring, Minn., would welcome an employer mandate, however. She has about 60 full-time and part-time employees, and is struggling to continue to provide health insurance coverage to them.
"It's part of my value system -- I want to treat employees fairly," Schurman said.
Her business pays about $100,000 a year for health insurance, she said. Competitors that don't cover their employees get an unfair advantage, she said.
"They should have some responsibility to provide insurance to their employees also," she said.
Schurman recently traveled to Washington, D.C., to talk to members of Congress about the need for health care reform. She is a member of the Main Street Alliance, a coalition of small business owners that supports giving individuals and small employers the option of getting health insurance through a government-run plan. This would help reduce costs by providing competition to private insurers, the alliance contends.
Alliance member Deanne Anderson, owner of Waterstone Spa in Ashland, Ore., agrees on the need for a public plan, but she has "mixed feelings" about an employer mandate. Her business would be exempt from the mandate in the Senate HELP Committee bill, but she said even businesses with more than 25 employees often can't afford health insurance or a $750-per-worker assessment.
"I really would feel sad to think that some businesses might go under after years of hard work, struggling to stay alive in this economy, because they were mandated to do something that they really can't afford to do," Anderson said.
Mandate really about revenue?
About 90 percent of businesses with 25 or more workers provided health insurance in 2008, according to a study conducted by the Kaiser Family Foundation and the Health Research & Educational Trust.
The coverage rate dropped to 78 percent for businesses with 10 to 24 employees, and 49 percent for firms with three to nine employees. So most of the businesses that don't currently provide insurance would be exempt from the Senate HELP Committee's "play or pay" mandate. The Congressional Budget Office concluded the bill would have little impact on the number of Americans who receive insurance through their employer.
An employer mandate isn't about expanding coverage, said Neil Trautwein, vice president and employee benefits policy counsel for the National Retail Federation.
"I think it's about raising revenues," he said.
He fears many members of Congress want employers to pay for health insurance even if their workers get it somewhere else.
Massachusetts collected a lot less revenue than it expected when it imposed a $295-per-employee tax on businesses that don't provide adequate health insurance, said Jon Hurst, president of the Retailers Association of Massachusetts. (Businesses with 10 or fewer full-time employees were exempt from the state's "play or pay" requirement.)
The response by state officials was to propose increasing the coverage requirements for businesses in order to generate more tax revenue, Hurst said.
Costs went up in Massachusetts
The biggest problem with the Massachusetts health care reform effort, however, was that it did nothing to lower the cost of health insurance for small employers.
"Small employers have seen nothing but double-digit increases since the law went into place," Hurst said.
Instead of focusing on affordable coverage, Congress is considering requirements -- such as lower annual deductibles -- that would make health insurance more expensive, said Amanda Austin, director of federal public policy, Senate, at the National Federation of Independent Business.
NFIB supports market reforms to make insurance more affordable, but not at the price of an employer mandate.
"We still believe it's a job killer and it will absolutely harm businesses," Austin said.
Trautwein said there are still "faint embers of hope for fair and reasonable comprehensive reform," but the National Retail Federation is "quickly coming to the view that we're going to have to fight the end product in the end."
"We're really disappointed," he said.
And people wonder why conservatives are against the so-called "public option." How many employers are going to just give away $55,000 per year or more when there is another option available for their employees? It doesn't take a rocket scientist to figure this out.
Well, that's the plan. We'll see if it works.
In other words, we will take it from you at gunpoint.
Employers started paying for health insurance for two reasons..wage control and labor shortages. If we didn’t have 12 million or more illegals in the country..maybe we would have a labor shortage and business’s would have to compete for labor and improve wages and benefits. A business who didn’t couldn’t get workers.
Many employers will just pay the fine and drop their plans..since it is cheaper. No shortage of semiskilled and unskilled workers right now.
Good grief....I pay more than $750 a year for Medicare and I gave they had a sh**load of my money to start with. Makes no sense that a working person would pay less than someone on SS...
What a great way to keep small businesses from expanding beyond 25 employees.
“Businesses with 25 employees or more would be required to offer health insurance or pay $750 a year per full-time worker to the federal government, under health care reform legislation being considered in the Senate.”
All I gotta do is pay $750 per year for each employee and I’m off the hook for health insurance?? Yippee!! I pay nearly that much PER MONTH per worker now!
Or, laying off a few employees so as to have fewer than 25.
Many companies would jump at the chance to only pay an outlay of $750 year for their employees health insurance. I expect a lot of companies will cancel existing health insurance, pay the government their $750, and tell the employee to go buy their health insurance from the federal government. The problem is it will cost the worker a whole lot of money to make up the difference, since their company group rates will no longer be available.
First of all it’s illegal for the government to require businesses to pay for insurance.
Second it will mean the end of many businesses.
Third, if you work at a company with 26 employees, start looking for another job.
Fourth, if you apply for a job at a company with 24 employees, forget about it.
Fifth, the “25” will soon be 15, then 10, then 5.
‘Progressives’ can’t do math. Or can they? Is this a ‘Cloward Piven Stragety’ to cause the collapse of the system?
More government intervention into small business. ‘When you make a deal with the devil, YOU are the junior partner.’
I guess I’m going to have to figure out how to get my employee numbers below 25 just to stay independent.
Can anyone say: Government mandated extortion?
How many employees do you have again?
I’ve met with plenty of employers who feel the same way.
If the employer/owner supports Obama, they seem to feel it is their way of “supporting his plan.”
I suspect plenty of these employers will set up ways to cover their own personal medical expenses and options, while they throw their employees into the Obama experiment.
The 750 per year will soon become 1,000 “we didn’t know it would cost so much” then 2,500, then 4,000.
Vintage Hillary Clinton - 1994
When told the (health) plan could bankrupt small businesses, Mrs. Clinton sighed, "I can't be responsible for every undercapitalized small business in America."
Also, when a woman complained that she didn't want to get shoved into a (health) plan not of her choosing, the first lady lectured, "It's time to put the common good, the national interest, ahead of individuals."
Democrats could care less about the small business men and women of this country. Hence the reason why there was no business stimulus to come out of this Obamination of a "stimulus" bill.
Or, there will be a lot fewer FTE’s and a lot more contractors. Microsoft for one manages to employ thousands
of contractors and pay zip zero nada for benefits.
Once you reach the 25th employee you just setup a new LLC and start over with employee #1.
It’s also a great way to keep part-time employees part-time, such as Walmart has been doing for the last eight months.
The company I work for runs very lean. My first reaction to this story was, how many heads will roll to get us to 24....
And just what the hell will the employer get for that $750 a year from the federal government since WE (the taxpayers) ARE the federal government?! Is this like a 'service fee' or something like credit card companies and banks charge?
You have to be pretty savy/stupid or take your pick to keep coming up with another word for T A X!
Obama is solid gold for lawyers. How many companies will splinter into new 24 person businesses?
I'm already starting to plan my exit from my business. I figure that over time, the “pay” part of “pay or play” will come to equal the [then-even-more-inflated] cost of group health insurance, and there will be no advantage to giving up one’s group health policy.
However, that could take several years.
In the meanwhile, I'd save a big pile of money every year, and that would go right to the bottom line, which, when determining the value of my company, would add a multiple of the money I save to the sale price of the business.
Many companies will jump at the chance to increase the bottom line so easily.
This is a recipe to destroy privately-provided health insurance.
I am a small business owner and if this is the plan sign me up ! I pay approx $250K per year for 55 employees. I could save 200K on this program; although they will tax that profit but I still come out ahead.
This is probably an error and it should be $750 per month....
Answer: it can't.
RETAIL BAKERS ASSOCIATION NAMES NEW PRESIDENT
LYNN SCHURMAN, CERTIFIED DECORATOR, OWNER COLD SPRING BAKERY
April 14, 2008
A participant in RBAs March on Washington, held March 12 in conjunction with the American Bakers Association, Schurman states the price hike is necessary in order for small bakeries to survive.
Retail Bakers of America (RBA)a 501(c)6 not-for-profit trade association located in McLean, VA
Remind me to avoid this bakery...(they are also wholesale to other retailers & grocers)
Naw. Its just the way that government business is done on the slippery slope.
Give it time and it will be $750 a day
she is a typical liberal democrat
There is another hidden tax increase here as well. Today, the employee contribution is paid with pre-tax dollars. Assuming every employer who owns a calculator will quit offering benefits, the employee contributions will become taxable income (or pay cuts.)
“And just what the hell will the employer get for that $750 a year from the federal government”
Its not the employer, its the employee who will get this gem. Can you imagine the kind of health care they will get for $750 per year? I as an employer, will make sure my family has a much better plan. I am trying to talk my wife into running for Congress so I can get the crown jewel of all plans!
$750 for a full year is a whole lot cheaper than paying insurance premiums.
Lynn Schurman wants to see the same sense of commitment from Minnesotas congressional delegation that she feels for finding a solution to the nations health care crisis.
Thats why the Cold Spring Bakery owner spent the past two days in Washington with other Minnesotans, dropping in at lawmakers offices to talk about their health care experiences and to stress a need to revamp the system.
Theres a sense of urgency that we cant let this opportunity go by, Schurman said. We need to have health care reform, and we need to have something that works for small businesses.
The activists participated in a demonstration outside the U.S. Chamber of Commerce and attended a public interfaith service Wednesday. They wrapped up their visit Thursday at a Capitol Hill rally of thousands, where Sopranos and Nurse Jackie star Edie Falco was among the key speakers.
The campaigns main message is that Congress needs to pass a health care plan that provides coverage for the estimated 46 million Americans who lack it, reduces the overall costs of health care and includes a public option.
July 6, 2009
It's wedding cake season, but at one Minnesota bakery, the boss has left the building to attend to other business.
Lynn Schurman struggles to provide health care for her 65 employees at Cold Spring Bakery and she wants Congress to know about it. So even with 23 tiered cakes on order for weekend nuptials, Lynn Schurman recently hung up her apron to join 500 faith-based activists to push health care reform on Capitol Hill.
Their goal? Pressing Congress to provide a so-called “public option,” essentially a government-run insurance plan, in the upcoming legislation.
Schurman, a member of St. Boniface Catholic Church, said health care reform reflects the Christian ethic of helping those described in the Bible as “the least of these.” It also “goes right to the heart of Catholic social teaching,” she said.
The lobbying push was organized by the Gamaliel Foundation, a Chicago faith-based social justice group that once trained a young street organizer named Barack Obama.
I thought we were supposed to keep faith & government separate (except when it benefits the left).
The employees will then go into the government health plan, which will ration their care canada-style. They will get all the health care that you can buy for $750/year once you have paid the cost of a huge federal bureaucracy.
Of course taxpayers will foot the bill for a lot of stuff too.
Isn't that the truth. I don't think DC could handle it if a NORMAL human being landed on their planet!
Guess I have to do some firing to get down to the 25 limit.
That 26th employee is dead meat.
Correct. It started out exactly like this in MA. So many employers were opting to pay the penalty that after less than a year, the penalty was increased. That's the idea in the first place.
our congresscritters do nothing but piss me off. These a$$holes cough and then rush over to Bethesda Medical and get top notch treatment instantly. It doesn’t work that way out in the real world. As a pilot, they should have to use the Medicare system for 4 years before cramming govt run health care down our throats.
I have insurance but never, i mean never, use it for anything other than routine check ups - I would come out ahead if I were to drop the insurance and pay as I go. The only conforting thought about me insurance is the IF I get cancer or need some catastrophic care I am covered. Been paying for 20 years with no realized benefit as of yet.
Businesses with 25 employees or more would be required to offer health insurance or pay $750 a year per full-time worker to the federal government, under health care reform legislation being considered in the Senate. ... A "play or pay" employer mandate..Idiots. A bunch of IDIOTS. That's what these professional politicians are are. If I'm an employer with 25 (or more) employees I'm paying the $750 fine you beltway morons.
But would I really be "paying" it?.. no way, the employee(s) would. It would come right out of his pay and/or any future wage increase. And the best thing is, they would hardly even know it!
That fact is 'employers' will pay this $750.00 fine when pigs fly.
For a *typical* non-union employee there's six (6) 'paid' Federal Holidays, normally five (5) 'paid' sick days and after a couple years, a two (2) week 'paid' vacation, that amounts to 168 'paid' non working hours per year.
Based on a typical eight (8) hour day that brings down the total in-house working hours to 1912 hours per year. Dividing that $750.00 'fine' by 1912 hours = $0.392 an hour. So that amount, or rounded to $0.40 an hour is what I deduct from his pay ($0.40 x 1912 = $764.80). From the day this thing goes into effect he gets a pay 'decrease'. That's *only* $16.00 a week from his gross, he won't even miss it. (1)
And when annual 'Raise Time' comes around, same thing. Instead of say a $2.00/hr raise, he gets a $1.60 an hour raise. And if he doesn't like these new terms -- see ya Francis, here's a box and there's the door.
And when he gets home and after he tells his wife, who will be jumping with joy (ha-ha-ha), he can call Nancy Pelosi and thank her for his new lower salary.
(1) For the 1912 hours the employer comes out slightly ahead. But you have to recover something for added overhead costs. And at 2080 'paid' yrs a year, it would only be $0.36 an hour deducted, $14.42 less a week, but that just breaks even.
no offense to idiots.
Then just game the system. Have all the seniors "go to work part time" doing "watching the grass grow" at a reputable "shell" company and dump medicare and pay the 750 per year (375 if you are part time) and get health ins. that way.
I should add that any intrusion in the free market becomes an exercise in “whack a mole”. The free market will game the system and win out in the end.
Government intrusions of this nature cause managers to make business decisions based on arbitrary rules or artificial criteria as oppsed to sound business practices.
Why grow a small business to the point you have to staff beyond the 24 employee limit when the increase of one employee could turn a profit into a loss?
Why not just start a second, ancillary business?
Why not just stay small?
Why not just buy foreign or create a foreign based manufacturing arm?
Why not just subcontract every possible activity?
There will be significant unintended consequences to this ill advised government takeover.
That employee, who today is quite content to pay his or her $100 or $150 portion of their health insurance premium through payroll deduction, will actually think they’ve gotten a pay INCREASE! Since the employer will pay the fine and drop the health benefit, instead letting mother government take care of the empployees’ needs, the employees will no longer have that payroll deduction. So, they might get a bit taken out to cover the $750 fine each check, but that will be more than made up for by $50-75 per check (much more if they are covering their family) that will no longer be deducted to pay health insurance premiums.
To the employee, it looks like Obama has saved him money each month.
Same here. Basically catastrophic. Some routine stuff is covered.
When doc gives me an RX (always a brand name), I ask if there is a generic version. Many times there is. They look stunned that I would even ask. Doesn’t your insurance cover it, they ask. I say no and even so, why should my insurance pay 3 or 4 times more for a brand name if a generic is just as good?
If more people did that and opted for generics, I’m sure drug costs would go way down. But for many insurance plans, no matter what the RX, you only have a few dollars, so there’s no incentive to seek a cheaper option. With our insurance, we only get a small discount - maybe 10-15%.
This idea actually sounds counter production to the Max Baucus idea of taxing health care benefits. If employers drop coverage, then workers won’t have any job related health care to be taxed.
That employee, who today is quite content to pay his or her $100 or $150 portion of their health insurance premium through payroll deduction, will actually think theyve gotten a pay INCREASE!Yes you're right in that respect.
My scenario was based on my experiences where I always paid nothing, the employer paid the entire premium.
This was *typical* as we had non union personnel in the office; like Engineering, Estimating Dept(s), and Union personnel outside on construction sites who had a boat load on benefits (Chicago metro area). The paid Health Insurance for us was an 'equalizer' of sorts.
(I prolly should have clarified a bit more)
Not near that many.
****I should add that any intrusion in the free market becomes an exercise in whack a mole. The free market will game the system and win out in the end****
I disagree. Since the government has the force of guns and can change the terms of the contract at will, they will keep stacking the deck in there favor whenever they see fit.
This $750 a year will change only in an upward direction and the 25 employees will only go down.
This obvious lowballing of the cost is just to make all the companies that fall under the current guidelines have to do it to stay competitive, then once the trap is sprung the terms will shift in the governments favor after the private insurers have lost most all of their customers and stop providing health care plans altogether.
This entire exercise is for government to end up in complete control of the healthcare system...so they can royally screw it up.
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