This math doesn't add up...
There is a provision in the ObamaCare bill that forces employers who have fifty or more employees to either provide health care insurance to their employees or pay a $2,000 fine per employee after the first thirty.
Here's how ObamaCareWatch describes the rule:
For firms which do not offer insurance any insurance, have more than 50 employees, and have at least one employee receiving insurance subsidies, they must pay a tax of $2000 per subsidized employee. The individual mandate requires everyone to purchase health insurance. The tax is applied to all of a firm's employees (after excluding the first 30), not just those that are subsidized. For example a firm with 51 employees would pay $42,000 in new annual taxes, and an additional $2,000 tax for every new hire.When I look at that, I think it would be obvious to see how employers would be motivated to stop hiring employees when they reach forty-nine.
Health and Human Services Chairwoman Kathleen Sebelius sees it differently, though. She sees the penalty as being "a great incentive" to hiring more:
CNSNews.com asked Sebelius, "Part of the health care law requires small businesses that grow to over 50 employees to provide health insurance to their employees or face a penalty [starting in 2014]. Do you think that may affect their incentive to grow–small businesses–to above 50 employees?"The incentive is to provide health insurance in order to keep quality people. Businesses are not motivated to hire more employees because of a fine imposed by the federal government.
"I hear, frankly, just the opposite from small business owners … where they say the way that they retain and recruit the best possible employees is with a benefit package that is solid; that often they lose good employees because they can't provide affordable health coverage, they go down the street or around the corner, even though businesses like Frager's are a family–absent that protection that people have for their employees," Sebelius said at a press conference about the Affordable Care Act's insurance exchanges at Frager's Hardware on Capitol Hill in Washington, D.C.
"So," Sebelius said, "I think that this will actually be a great incentive–as you know the 50 people also have lots of part time worker exclusions, seasonal worker exclusions–and I don't hear anything from people who say, 'Oh, I would never grow my business past this threshold' but are very enthusiastic about the notion that this is a competitive issue.
Furthermore, because of the fine, some businesses are actually finding it cheaper to pay the fines and cut the insurance benefit out completely:
Another study found that among businesses with a "high awareness" of what ObamaCare is all about, more than half are planning to drop health care insurance benefits for their workers.This study from the Kaiser Family Foundation (pdf) shows the difference between the cost of the fine vs. the cost of insurance premiums:
The result spells death to private insurance and life to nationalized healthcare just as conservatives predicted.
ObamaCare requires employers with more than 50 employees to provide insurance for their employees or face a $2000 fine.
Many employers are quick to conclude that they are better off to pay the fine than the escalating premium costs.
AT&T calculated that dropping coverage and paying the penalty will save them $1.8 billion annually.
That makes the decision pretty obvious.
Not only does the ObamaCare plan not motivate employers to hire above fifty employees, pulling another $2,000 out of the budget, but it motivates them to drop the health care coverage for all their employees completely.
The average annual premiums for employer-sponsored health insurance in 2010 are $5,049 for single coverage and $13,770 for family coverage. Compared to 2009, premiums for single coverage are 5% higher ($4,824) and premiums for family coverage are 3% higher ($13,375).
Since 2000, average premiums for family coverage have increased 114% (Exhibit A). Average premiums for family coverage are lower for workers in small firms (3–199 workers) than for workers in large firms (200 or more workers) ($13,250 vs. $14,038). Average premiums for high- deductible health plans with a savings option (HDHP/SOs) are lower than the
overall average for all plan types for both single and family coverage (Exhibit B).
For PPOs, the most common plan type, the average family premium topped $14,000 annually in 2010.
I'd like to say that's an unexpected consequence of the plan, but I can't. I think that was the whole idea. Destroy private health care. Implement single payer.
You can see it happening.
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