The National Federation of Independent Business (NFIB) has strongly advocated that states not expand their Medicaid programs as allowed under the Affordable Care Act (Obamacare). This wasn’t a business decision by the organization because expanding Medicaid will benefit small businesses as I have pointed out in opinion editorials (here, here and here).
But now that the NFIB has been politically successful in convincing most states to either outright reject expanding Medicaid or delaying the decision (only 22 states plus the District of Columbia have committed to the expansion), they are now trying to undo the damage to small businesses that their advocacy will spawn.
In a March 18th letter the NFIB sent to the IRS, the faux small business organization admits that any state that follows the NFIB’s position against expanding Medicaid will result in many small businesses in that state with 50 or more full-time employees being subject to significant penalty fees for those employees who would have qualified for Medicaid. Under Obamacare any businesses with these numbers of employees are required to either offer health insurance or pay a $2000 annual fee per employee if even one of the workers receives a health insurance premium subsidy within the new insurance exchanges. However a penalty fee would not be paid on employees covered by Medicaid.
This financial liability for not expanding Medicaid has been well known since the law was passed. The NFIB simply chose not to share this information with the state legislatures and governors it apparently has so much sway over because it didn’t fit into their mantra of how “bad” Obmacare is.