Under ObamaCare, if an employer offers a generous health insurance plan that does not happen to cover the law’s mandated minimum set of “essential health benefits” to its employees, the employer would pay more in penalties than if they had offered no coverage at all.
There are 10 coverage categories that comprise the essential health benefits, covering a wide array of benefits including pediatric oral and vision care, substance abuse services and preventive chronic disease management. The state of Illinois already required that plans provide a minimum set of mandated coverages, offerings and benefits, although those requirements were not as lavish as those established by ObamaCare.
Even if these coverage mandates are well-intentioned, they drive up the cost of insurance coverage and may put employers in the position of having to decide on whether to cut jobs, eliminate health benefits or forgo raises to employees to comply with the new requirements. According to a recent report by Mercer, a health benefits consulting firm, as reported in LifeHealthPRO: ”Employers that opt out of Obamacare can expect to pay $173.33 per employee per month in 2015. And those that offer plans that are considered too pricey or inadequate should plan to fork over $260 per employee per month.”
Under the law’s employer mandate, employers with 50 or more full-time employees or full-time equivalents are required to offer “qualified and affordable” health insurance coverage to their employees. This provision of the law was supposed to go into effect Jan. 1, 2014, but was delayed this past summer for one year by the Obama administration and was recently delayed again for another year for those employers with 50-99 full-time or full-time equivalent employees.
Larger employers with 100 or more employees will be subject to the employer mandate beginning in 2015. With the state already facing the second-highest unemployment in the nation, Illinois cannot afford a policy that threatens to further undermine job stability and prospects for the state’s lowest-skilled and lowest-wage workers.
There is near-universal agreement from both sides of the political aisle that the employer mandate is a job-killer. Even groups that initially supported the law have come out against it, including labor unions such as the Teamsters union.
And instead of rewarding employers that offer coverage, it penalizes those that offer the wrong kind as determined by federal dictates. For all the political victory laps over ObamaCare enrollment, the vast majority of whom were previously insured, one has to wonder how much celebrating there will be at this time next year.
Naomi Lopez Bauman is Director of Health Policy for the Illinois Policy Institute.