Urban Institute: Kill the Employer Mandate

Caduceus with First-aid KitA new report from the Urban Institute urges the end of the employer mandate. The mandate has little effect on coverage: 251.1 million people would have health insurance if the employer mandate is fully implemented, versus 250.9 million if it were repealed. However, the mandate hurts low-income workers, by influencing some employer to cut back both hours and headcount:

Creating arbitrary thresholds (e.g., potential penalties for firms of 50 or more workers not providing coverage for employees typically working 30 or more hours per week) for financial requirements will change the employment decisions in some firms, and at least some workers will be adversely affected by them.

(Linda Blumberg, John Holahan, & Matthew Buettgens, Why Not Just Eliminate The Employer Mandate?)

Comments (8)

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  1. Anne says:

    This makes a lot of sense. I think most low-income workers would agree that they’d rather have a job without employer-provided health insurance than neither a job nor employer-provided health insurance.

  2. RSW says:

    If we could repeal the employer mandate, why not just kill the whole thing?

    • Perry says:

      Yeah, that’s the ticket. If we keep taking stuff out, soon there will be nothing left.

    • Erik says:

      That is the GOP plan. Defunding. The Mandate is a revenue source that will help keep the program solvent. Why would they want it eliminated?

  3. Devon Herrick says:

    There’s an old saying in economics…

    If you want to discourage something, tax it; if you can to encourage something, subsidize it. The employer mandate is essentially a tax on labor that discourages job creation.

  4. Bob Hertz says:

    The history of the partial employer mandate will be very interesting to write someday.

    The drafter of the ACA thought that if there was a penalty for not covering workers who had 30 hours a week, employers would rush to cover such workers and avoid the penalty.

    The drafters did not understand the pathetic lack of bargaining power for part time employees. The employers just cut them to 29 hours.

    if these employees had strong unions, the cut to 29 hours would have been accompanied with a wage increase, so that the employees would have the same net income as before.

    (That has happened in France.)

    Instead the drafters showed complete ignorance of the American labor market.

    • Leonard P. says:

      I completely agree. The employer mandate offers a lot of incentive to either get below 50 full-time employees or to shift employees onto the health care exchanges, because the cost of providing insurance exceeds the penalty (between $2,000 and $3,000 per employee) of not offering insurance. It is a bad system overall!