Health Care Law Doesn't Give Employers Many Options
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Now that the Supreme Court has decided the health care law is here to stay, businesses of all sizes are regrouping and trying to decide what to do next to keep their costs from soaring.
A growing chorus of businesses says they’ll just opt out of offering health insurance to their employees altogether and pay the government-mandated, $2,000 per employee fine.
A significant number of respondents to the Chamber’s recent small business quarterly survey reported the likelihood of canceling insurance coverage for employees, as paying the penalty would be less expensive for their company. Similarly, a Gallup Poll found that "Americans say the law will make things worse rather than better for taxpayers, businesses, doctors, and those who currently have health insurance."
The Washington Post reports on a study that takes an in-depth and sobering look at the actual costs of dropping health insurance and the news for employees is not good:
“[If] an employer decides to drop insurance coverage altogether and let the worker handle it herself… that saves the company about $5,000 per employee. The worker, meanwhile, ends up spending an average of $12,888 more on health care costs than they did when they had an employer plan. That figure, it’s worth noting, includes any tax subsidies that the law would provide to the employees.”
Thirteen thousand dollars is a lot of money for the average working family…money that could be spent on child care or buying a reliable car to get breadwinners to and from work, for example. That’s IF the breadwinner still has a job. This CNN Money story shows that businesses are looking into whether they can cut back on the number of full-time employees or their hours to avoid hitting the 50-employee threshold that triggers the employer penalties.
As business owner Mary Miller, CEO of JANCOA Janitorial Services, Inc. recently told Congress, “because of the employer mandate, the health reform law will force many employers to stop offering the coverage that they currently offer and encourage employers to consider restructuring their businesses and moving their employees to part–time status in order to remain in business. This is not good for employees, it is not good for business and it surely won’t help our economy.”
And for those looking for a job, well, the health care law is not their friend. Just 3% of small business owners in the Chamber's survey report that the Supreme Court’s decision to uphold the law will make them more likely to hire new employees. Seventy-two percent said the health care law will make it harder for them to hire.