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House Committee Spars Over Employer Mandate

Margaret Dick Tocknell, for HealthLeaders Media, July 11, 2013

In a session that at times was testy, the witnesses and the committee members spent more than two hours debating the value of the employer mandate, focusing on the familiar themes that clearly resonated with many of the committee members: harm to low income workers, the negative effect on job growth, and the definition of affordability.

Roy noted that 97% of firms with 50 or more employees already offer health benefits and that the mandate seems like overkill to induce 3% of companies to offer healthcare insurance. He said the mandate "perversely incentivizes employers avoid hiring low-income workers" who might require subsidies to afford coverage and triggering a penalty for employers. He added that in lieu of paying the penalty, employers might turn to hiring "illegal immigrants, who are ineligible for subsidies."

Falk, who operates 12 franchised business units with more than 100 employees, including 43 full-time employees, said that as he looks at growing his business "the employer mandate…has an undeniable impact on my bottom line and is making me reconsider opening new locations." He added that he might consider reducing the hours of more employees from full-time to part-time to avoid the penalty.

 

An employer penalty of $2,000 for each full-time worker who receives subsidized insurance provides a "strong disincentive to for firms to higher workers from lower income households because they might become eligible for subsidies," stated Capretta. He said the news is full of stories about companies and local governments that are "racing to move as many workers as possible" to part-time status. "That is exactly what the American economy does not need… with the unemployment rate holding at 7.6%."

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