Urban Institute Suggests Eliminating the Employer Mandate
May 13, 2014 09:59 AM
The Urban Institute, a prominent liberal think tank, recently released a research paper suggesting that the Employer Mandate provisions in the Affordable Care Act should be eliminated. The study estimates that some 251.1 million people would have employer-sponsored insurance if the requirement is fully implemented in 2016 while 250.9 million would have it that year if it was dropped: a difference of 200,000 people.
Since 2011, NAHC has advocated for reforms that would eliminate or mitigate the impact of the employer mandate on home care. Potential remedies include an exemption of home care employers, a modification of the definition of "full-time employee," and additional funding to pay for the cost of health insurance or the employer penalty.
Companies such as Land’s End, Regal Entertainment, Wendy’s and SeaWorld recently announced they would be reducing hours for part time workers to fewer than 30 per week, the point above which they must provide coverage, the researchers said. NAHC has long warned that many home health care agencies would also be forced to cut staff hours to under thirty hours a week to comply with the Employer Mandate.
According to the Urban Institute research paper:
“Controversy over the Affordable Care Act’s employer mandate continues. The requirement’s implications for coverage are small, and yet the negative labor market effects of keeping it in place could harm some low-wage workers.
Under the law, employers of 50 or more workers are subject to a penalty if at least one of their full-time workers obtains a Marketplace subsidy. Employees offered coverage deemed affordable and adequate are prohibited from obtaining subsidies, as are their family members, and employers can avoid penalties by offering coverage to at least 95 percent of workers. However, the Administration has delayed the requirements until 2016 for employers of 50-99, for larger employers until 2015, and softened requirements for that first year. Yet there are anecdotal reports of employers changing labor practices even though penalties have yet to be implemented.
Our analyses as well as that of others find that eliminating the employer mandate will not reduce insurance coverage significantly, contrary to its supporters’ expectations. Eliminating it will remove labor market distortions that have troubled employer groups and which would harm some workers. However, new revenue sources will be required to replace that anticipated to be raised by the employer mandate.”
Dropping the Employer Mandate altogether, however, “should substantially diminish employer opposition to the ACA,” the researchers said. “In fact, without that burden, employers may play more of a role promoting the expansion of coverage under the law.” Discarding the mandate would lessen revenues coming in under the health law by about $4 billion in 2016. Factoring Medicaid costs and added private plan subsidies required because the affected workers would get coverage from these sources would cost the federal government $4.3 billion more per year.
For more on recent Employer Mandate coverage from NAHC Report, please click here.
To read the full research paper, please click here.