You Shall Not Pass (the smell test on employer mandate doom)

Screen Shot 2013-05-22 at 10.29.02 AMI’m a little busy for the rest of the week so this post will have to suffice, but it’s short and important so it’s worth your time. This, from an Ezra Klein piece, is the most clarifying paragraph I’ve read on the employer mandate in the Affordable Care Act (ACA):

“You’ve got 5.7 million firms in the U.S.,” says Wharton’s Mark Duggan, who served as the top health economist at White House’s Council of Economic Advisers from 2009 to 2010. “Only 210,000 have more than 50 employees. So 96 percent of firms aren’t affected. Then if you look among those firms with 50 or more employees, something on the order of 95 percent offer health insurance. So it’s basically 10,000 or so employers who have more than 50 employees and don’t offer coverage.” Those companies probably employ around one percent of American workers.

In short, the ACA requires firms who employ more than 50 full-time (currently set at 35 hours a week) workers to provide healthcare coverage or face a penalty. One of the continuing uncertainties surrounding the law is whether firms that qualify for the mandate would opt for dumping their coverage in favor of paying the cheaper penalty. Ezra provides a well-rounded reasoning for why we shouldn’t be so quick to think this will happen, but I was particularly surprised by the above paragraph. These are numbers even I didn’t know. Much of the conservative rhetoric surrounding the employer mandate has been prophesizing an impending business/employee apocalypse. The numbers above seem to tamp down such doom and gloom. Here’s how that looks in pie charts (of course):

1. The vast majority of businesses won’t be subject to the penalty because they have fewer than 50 full-time, non-seasonal employees.

Screen Shot 2013-05-30 at 1.55.37 PM

2. The vast majority of businesses who have more than 50 full-time, non-seasonal employees already offer health insurance:

Screen Shot 2013-05-30 at 2.12.04 PM

To be sure, the five percent of firms that would be subject to the penalty still employ a lot of people in absolute terms, but as Ezra writes still comparatively represent only “around one percent of American workers.”  Now it’s my subjective opinion that the minority of working Americans who work full-time and don’t receive benefits deserve access to affordable healthcare coverage even if it disadvantages in the employer in one aspect. You could just as easily argue they shouldn’t, or at least not through coercive isomorphic means. Fair enough. Yet given this perspective of the law’s impact, it’s disingenuous to describe the employer mandate as a proverbial army of Mordor set to raze the world of American business.

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One response to “You Shall Not Pass (the smell test on employer mandate doom)

  1. Pingback: Employer mandate (temporarily) shrugged | Punditocracy·

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