Employers Mandated To Provide Health Insurance Plan? Maybe Not
The newest wrinkle in healthcare reform comes from the Senate. There has been much speculation on the possibility of an employer mandate, which would require that businesses of a certain size offer a health insurance plan to their employees--considered by some as a surefire way to get more Americans insured. However, anonymous Senate officials have told the Associated Press that such a mandate won't be included in the final Senate bill. Health insurers were counting on such a requirement, in addition to a similar one for individuals, to gain more business. Still, this doesn't mean that private companies can can feel free to avoid offering more affordable group health insurance to their employees.
According to these sources, there will be penalties levied against large companies whose employees are forced to apply for government subsidies. The subsidies are intended to help people buy individual health insurance on the open market, which tends to cost more than an affordable group health insurance plan. Unlike the Senate Finance Committee's version of the bill that charged businesses fines based each employee who needed the federal subsidy, this rumored proposal will multiply the fee by a company's total workforce regardless of how many employees were actually uninsured. It will only apply to companies with over 50 employees, but the fine could be as high as $750. A firm at the small end of that range could see a significant bite into their revenue, if only two or three of their employees applied for the subsidy.
Is this a good strategy? It is unclear. For one thing, most large companies falling under this regulation already offer a health insurance plan to their employees. They may not be ideal, but there are generally comprehensive options available that are at least partially covered by the employer. Therefore, this negative reinforcement doesn't seem to be necessary. A major percentage of the uninsured population consists of people who work for the small businesses that, combined, employ most Americans in the private sector. The size of their workforces aren't big enough to allow them to acquire health insurance at the cheaper rates for large groups. Unfortunately, they either have to pass all of the cost onto their employees or forgo offering health insurance altogether. This proposal also won't be much help to the unemployed, whom will probably be unable to afford health insurance even with subsidies. Granted, it's possible that the fines levied on big employers will be used to partially fund subsidies for everyone else. It might be a Plan B for Congress if they're unable to push the public option through.
Yamileth Medina is an up and coming expert on Health Insurance and Healthcare Reform. She aims to help people realize that they don't have to go without a health insurance plan while waiting for a public option, if it ever gets passed.
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