Healthcare roadblock to reform: Employer mandate
From the August 2009 issue of Ceridian Connection.
The final battleground issue in healthcare reform is whether or not to enact a federal law mandate that would require employers to provide health coverage to their employees.
Known as "Play or Pay," the employer mandate would offer employers a choice: provide coverage to employees or pay a substantially higher payroll tax to help fund premium subsidies for coverage purchased through the exchange. The legislation approved by the House Energy and Commerce Committee, HR 3200, would require employers to pay an 8 percent payroll tax or provide 72 percent toward the cost of a basic benefits package for full-time employees and a smaller percentage for part-time employees. A provision in a similar Senate bill mandates a minimum 60 percent premium cost share or a $750 annual fee per uninsured full-time employee.
The National Retail Federation (NRF), which represents large and small retailers, chains and restaurants, is leading the opposition to the employer mandate. NRF argues that, "Employer mandates of any kind amount to a tax on jobs -- a dangerous anti-employment step to take in the middle of a deep recession."
On the other hand, mandate advocates claim that "free rider" employers increase the numbers of uninsured and shift healthcare costs to providers and other employers who do offer employee coverage.
Here again, it's likely that lawmakers will devise a compromise, perhaps to provide an exemption for smaller businesses unable to afford "Play or Pay" requirements. Another compromise might be to set the standard for "qualified" coverage low enough to protect the vast majority of health plans employers now offer, including HSA-based high deductible health plans.
In any event, the debate over an employer mandate, like that over the public plan option, will remain contentious right until the final legislation is adopted. Indeed, all four of these issues will remain on the table over the next few months.
The final battleground issue in healthcare reform is whether or not to enact a federal law mandate that would require employers to provide health coverage to their employees.
Known as "Play or Pay," the employer mandate would offer employers a choice: provide coverage to employees or pay a substantially higher payroll tax to help fund premium subsidies for coverage purchased through the exchange. The legislation approved by the House Energy and Commerce Committee, HR 3200, would require employers to pay an 8 percent payroll tax or provide 72 percent toward the cost of a basic benefits package for full-time employees and a smaller percentage for part-time employees. A provision in a similar Senate bill mandates a minimum 60 percent premium cost share or a $750 annual fee per uninsured full-time employee.
The National Retail Federation (NRF), which represents large and small retailers, chains and restaurants, is leading the opposition to the employer mandate. NRF argues that, "Employer mandates of any kind amount to a tax on jobs -- a dangerous anti-employment step to take in the middle of a deep recession."
On the other hand, mandate advocates claim that "free rider" employers increase the numbers of uninsured and shift healthcare costs to providers and other employers who do offer employee coverage.
Here again, it's likely that lawmakers will devise a compromise, perhaps to provide an exemption for smaller businesses unable to afford "Play or Pay" requirements. Another compromise might be to set the standard for "qualified" coverage low enough to protect the vast majority of health plans employers now offer, including HSA-based high deductible health plans.
In any event, the debate over an employer mandate, like that over the public plan option, will remain contentious right until the final legislation is adopted. Indeed, all four of these issues will remain on the table over the next few months.
| Four consensus issues | SPACE | Four roadblocks to reform |
| Insurance market reform | SPACE | Financing healthcare reform |
| Creation of a health insurance exchange | SPACE | Saving for out-of-pocket health costs: FSAs in the spotlight |
| Subsidies for lower income households | SPACE | Public plan option in the health insurance exchange |
| Support for wellness and prevention | SPACE | Employer mandate |
| Contact Ceridian: Request Sales Information Careers at Ceridian Customer Support: Customers | Customers' Employees Ceridian Benefits Web site |  | Payroll & Human Resources Services |
