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Saturday, June 21, 2014

Employer mandate soon to become history

By John Niles
 
Affordable Care Act employer mandate
Individuals with incomes below $11,490/yr do not qualify for subsidies
The Affordable Care Act faced a lot of criticism from business groups over the issue of group insurance. The Act requires companies with 50 or more employees to provide health insurance to their regular or full-time employees.
 
It seems like law makers in Washington have started to tip in the favor of these business groups. Reports confirm that support for this so called employer-mandate is fast eroding in the power corridors of the Whitehouse.
 
Recently the Urban Institute of Washington published a study that iterates the reasons for negating the employer mandate. Linda Blumberg, one of the authors of the study, says that the first thing we need to understand is the impact of employer provided health insurance on low wage workers. According to Linda, a minimum wage worker can do far better by purchasing a government subsidized health insurance through one of the marketplaces. The reason behind this argument is plain and simple. Many lower-wage workers make so little that they easily qualify for Medicaid and subsidized coverage under Obamacare.In almost any situation, buying a subsidized health insurance through one of the marketplaces is going to be economical as compared to employer provided health insurance.

Is employer sponsored health insurance really a benefit?

Some people argue that there is nothing wrong with the employer provided health insurance, especially if the employer is offering to pay a large chunk of your premium. Well it’s not a very good deal, says Mark Paul, a health care system researcher and economist at the Wharton School of University of Pennsylvania.
 
Paul and a lot of other healthcare economists believe that employers view their contribution towards health insurance as a part of the total compensation paid to the employees. This is a relevant belief as it is seen all across the United States that employees who get employer-provided health insurance get lower wages as compared to those who do not get any insurance from their employers.

Can we simply write-off employer sponsored health insurance?

We cannot simply write-off employer provided health insurance. Employer sponsored plans allow employees to buy health insurance from tax free dollars. But this benefit is relevant for only those employees who get high wages. For employees with low wages, there is little or no benefit at all in employer sponsored health plans.
 
Some experts are in the favor of employer mandate. They say that employer mandate is necessary to stop employers from dropping the insurance coverage all together. But this belief hardly seems credible as employers already have plenty of reasons to keep offering employer sponsored health plans to their employees. Not only does it help the employers to save on Federal Tax but it also helps them to attract new talent and retain their experienced staff.

Is employer mandate worth it?

Another fact pointed out by the Urban Institute is that employer mandate is not going to be very helpful in increasing insurance coverage. According to statistical reports and surveys, less than 200,000 people will be covered by the mandate in the upcoming year. With such negatives, there is hardly any reason for hanging on to the employer mandate.
 
 
About the author: This article was authored by John Niles. John is a journalist and also works as a freelance writer. Most of his articles are centered around health care problems. Compare health insurance policy and apply for medical coverage online. Get health care insurance coverage and get free health care insurance quotes today online.
 
Image license: US-PDGov