Drop the employer mandate

Should businesses be required to offer health insurance?

That was a big issue back in 2009 when Congress was debating healthcare reform and ended with the passage of the Affordable Care Act the following year.  Under that law now referred to as Obamacare, only businesses with 50 or more full-time workers (at least 30 hours a week) are required to either offer health insurance to workers or pay a fine under certain conditions.

The controversy about this employer mandate hasn’t gone away and has now resurfaced in two forms.  First, the Obama Administration has delayed the employer mandate for businesses with 50-99 employees until 2016 and for larger employers until January 2015.  House Republicans are furious about these delays (even though they oppose the mandates) because they argue that the President cannot legally delay the implementation of the law.  House Speaker John Boehner has filed a lawsuit against the President on that ground.

And now a story in The Hill today points out that it is time for the Administration to decide whether the employer mandate for bigger businesses will go into effect in January, be delayed again or some variation of lesser reporting requirements.  If the decision is to keep the January 2015 start-time, then some key data collection forms need to be provided by the Treasury Department and provided soon if businesses with 100 or more employees are to comply.

The South Carolina Small Business Chamber of Commerce is happy for all the delays because we never supported an employer mandate and I honestly don’t think they are needed for Obamacare to be successful.  Here is what I wrote to U.S. Senator Mary Landrieu on November 25, 2009 regarding the employer mandate in the Senate bill for businesses with 50 or more employees to provide health insurance.

We would recommend the total elimination of any form of business mandate (including the free-rider provision) to offer health insurance. While small businesses want to offer health insurance to their employees, largely because they are competing for labor, and even though under the Senate bill 95% of South Carolina small businesses would be exempt from any requirements, business owners still resent being told that they must offer health insurance (even those that provide the benefit). Since any business mandate or free-rider provision is a major source of discontent in the business community and it only would generate about $28 billion (3.3%) of the bill’s revenue, we would suggest that this revenue be found somewhere else and the business requirement should be eliminated.

If the business mandate or free-rider provision is not eliminated, then we would recommend that the trigger for any business requirement be raised so that only businesses with over 100 employees would fall under the requirement.

Obviously we were unable to change the Senate’s mind but were satisfied that they Senate version of the legislation was successful and thus we have no mandate for 95-96% of South Carolina’s businesses.

But we still maintain that any employer mandate is not necessary.  We have an individual mandate and a very generous premium assistance program in effect to make health insurance very affordable for those not receiving health insurance through their employer.

Many businesses want to get out of the “insurance business” and would be very happy if the country would go to a single payer system where our taxes would pay the premiums for individual health insurance (we’re largely doing that anyway).  Unfortunately the employer mandate holds us back from moving in that directly.

If the House majority really wants to eliminate the employer mandate, then it should drop the frivolous Boehner lawsuit against the President and pass simple legislation to end all employer mandates under the Affordable Care Act.  My guess is that this would be a popular election-time move and there would be 60 Senators willing to concur without amendments and send the bill to President Obama for his approval.  Given the success of his signature achievement to date without implementation of employer mandates, I believe the President would do just that.

Obamacare does not need employer mandates to work.  It never did.

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