Skip to content

Employers Facing Hard Choices Under Democrats’ Health Law

April 28, 2010

With unemployment hovering close to 10 percent and underemployment — such as part-time workers wanting full-time work – even higher, Mercer’s annual employer health plan survey illustrates the harsh reality for employers and more importantly the employees that work for them under the Democrats’ health care overhaul.  The study found that at least 38 percent of employer health plans may fail to meet the new government health insurance mandates for full-time employees.  Additionally, Mercer found that 49 percent of employers would fail the government’s mandates with respect to the health insurance offered to part-time employees.  Explaining the choices facing employers, Mercer partner Tracy Watts said:

“If they don’t currently offer coverage to part-timers, can they afford to start, or to raise the minimum hours required for coverage eligibility? How do they respond if cost rises as a result of other reform rules? Certainly, employers can choose to limit a part-time employee’s working hours to avoid incurring penalties, but that may bring other consequences.”

And Mercer is not alone in this estimation.  The Philadelphia Inquirer’s interview with legal experts who advise employers on how to structure their health plans provides even more troubling assessments:

“Far more intriguing, though, is the feedback that they have been receiving from large employers with complex health and wellness plans.  Some health-care benefits managers have been telling Pinheiro that they see a future in which employers no longer provide coverage because the cost of dropping health insurance for employees, about $2,000 per person in federal penalties to employers, is far less than the current cost of providing family coverage, about $12,000 per employee… ‘There is an opportunity to get out of providing health benefits to employees.”

This is a predictable outcome of the Democrats’ grand experiment with America’s health care.  In fact, Democrats were warned of the disastrous consequences of the legislation leading up to the final vote, yet they pressed ahead anyway.  Here are just a few of those warnings:

  • National Association of Manufacturers (NAM):  “It is unfortunate that the House of Representatives passed a health care bill that is going to increase costs and make it difficult for manufacturers to continue to offer generous health benefits… Manufacturing has lost 2.2 million jobs since December 2007; this is no time to place additional burdens on America’s job creators.
  • U.S. Chamber of Commerce: “The Senate bill would: impose job-killing mandates and penalties on businesses, increase taxes and burdens on small businesses, create dangerous new entitlements while cutting Medicare, create new plan requirements that will increase costs, and ultimately do little to control the long term spiraling of healthcare costs.”