With the Senate’s comprehensive immigration bill set for a procedural vote later Tuesday, lawmakers still have not resolved a thorny problem under which the bill would effectively encourage employers to hire newly legalized immigrants over American citizens as a way of avoiding Obamacare’s taxes.
Under the existing Senate immigration bill, immigrants who have been in the United States illegally can obtain a provisional legal status after paying fines and meeting certain preconditions. But this population would have to wait at least 13 years to be able to obtain full citizenship, and it isn’t until then that they could qualify for government benefits such as Obamacare.
The problem arises when this rule interacts with another provision of Obamacare – the employer mandate. Starting in January, businesses with 50 or more employees who don’t offer workers health insurance that the federal government deems acceptable must pay a penalty if at least one of their workers obtains insurance on a new government-run exchange. The penalty is up to $3,000 per worker.
This means if the immigration bill becomes law, some employers could effectively face incentives of hundreds of thousands of dollars to hire newly legalized immigrants over American citizens, because the immigrant workers would not qualify for Obamacare benefits.
As the implementation of Obamacare approaches, there have been many news reports about companies considering cutting back full-time workers to part-time, or taking other actions to get around the mandate penalties. The immigration bill would offer employers another way out –hiring fewer American citizens and more immigrants with provisional legal status.
It’s not surprising that this unintended consequence hasn’t yet been resolved, because there’s no easy fix. One way of eliminating the problem would be to get rid of the employer mandate in Obamacare altogether – which would be a non-starter for Democrats. The other way would be to give noncitizen immigrants with provisional status access to Obamacare’s benefits – which would destroy any hopes of garnering Republican votes.
Jed Graham of Investor’s Business Daily first reported this complication in April. When I followed up back then, Sen. Marco Rubio’s spokesman Alex Conant told me it was exactly the type of issue that could be addressed during the legislative process. “[T]he scenario you raise illustrates both the absurdity of Obamacare, and why we have insisted on a lengthy process to review this legislation before any votes are taken,” Conant emailed at the time. “We always expected there might be a need for amendments to fix technical problems, and we’ll be interested in seeing what sort of amendments might be offered to improve this part of the legislation without giving Obamacare to illegals – something Sen. Rubio has always said he will not support.”
However, the issue was never addressed in any of the more than 200 amendments proposed when the immigration legislation made its way through the Senate Judiciary Committee. Another flood of amendments are expected to be filed later Tuesday afternoon, assuming the immigration bill clears the necessary procedural vote thresholds. My contact with multiple Senate offices offered no indication that this specific issue would be addressed. Conant did not respond to requests for comment on this story.