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.
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 they’ve 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.
****in there favor****
Oops...in their favor...
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