How Democrats' Health Care Bill Will Punish Businesses, Trigger Unemployment - The American Spectator | USA News and Politics
How Democrats’ Health Care Bill Will Punish Businesses, Trigger Unemployment

One of the most onerous aspects of the House Democrats’ health care legislation is the employer mandate, which would tax employers who do not offer health insurance to their workers. Not only does the proposal impose new costs on employers, but a whole new layer of red tape, both of which would undoubtedly lead to job losses and lower wages. But I thought it would be worth taking the time to walk everybody through just how onerous the requirements are in this particular provision, which starts being described on page 268 of the 1,990 page bill, under the heading: “Subtitle B — Employer Responsibility.”

Under the provision, employers would have to offer every employee “qualified” health insurance coverage. The type of insurance that is considered “qualified” will be determined by the Health Choices Commissioner, a new post that will be filled by the President and confirmed by the Senate. The Health Choice Commissioner, given many responsibilities throughout the legislation, would head up the newly-created Health Choices Administration. If a worker declines coverage but otherwise obtains insurance through the government-run insurance exchange, the employer will owe money to the government.

In order to prove that they’re complying with the new mandate, employers must submit whatever information that the Health Choices Commissioner requests, and the information must also be provided to the Secretary of Labor, the Secretary of the Treasury, and the Secretary of Health and Human Services.

For full-time workers, business will have to contribute at least 72.5 percent toward individual health insurance policies, and 65 percent for family policies. For part-time workers, the required percentage would be based on a proportion of how many hours they worked relative to the hours worked by a full-time employee. The exact proportion would be determined, once again, by the Health Choices Commissioner, in conjunction with the Secretary of Labor, the Secretary of the Treasury, and the Secretary of Health and Human Services.

Any employer with a total annual payroll of over $500,000 that does not meet these requirements will be subject to a new tax, which reaches as high as 8 percent once payroll reaches over $750,000.

The National Federation of Independent Business has estimated that an employer mandate would cost 1.6 million jobs over the first five years, and cut GDP by $200 billion. Whether or not you choose to believe that estimate, it’s clear that taken together, the provision would make it far more costly for businesses to hire new workers and maintain current staffing levels, by raising the price of labor as well as the regulatory burden. Basic economics tells us that if you raise the price of a good or service, then people will purchase less of it. In this case, rising prices for labor will mean lost jobs and lower wages. While the bill itself specifies that businesses cannot cut wages to comply with the mandate, this doesn’t take into account that businesses could simply offer lower raises to their workers over time. The legislation will particularly hit businesses hard that are highly dependent on part-time or seasonal workers. All I know is that if this bill passes, I’d hate to be the owner of a restaurant business.

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