Topics: Obamacare

Obamacare's employer mandate hits low-wage workers the hardest, study says

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Beltway Confidential,Opinion,Philip Klein,Barack Obama,Obamacare,Health Care,Employer Mandate

President Obama's health care law imposes penalties on larger employers who do not provide government-approved health coverage, but a new study from the Urban Institute and the Robert Wood Johnson Foundation argues that low-wage workers will be hit hardest by the provision.

"Employers with 50 or more workers not offering coverage pre-[Affordable Care Act] are the same employers that are highly likely to not offer in the future, therefore incurring the ACA's penalties," the study reads. "Because the nonoffering firms are much more likely to be firms dominated by low-wage workers ... low-wage employees will bear the greatest brunt of the penalties imposed. Therefore, using employer penalties as a tool for financing reform tends to be a regressive approach."

The arguments against eliminating the employer mandate while keeping the rest of Obamacare intact are that if employers aren't required to provide coverage, then they'll have a financial incentive to stop offering it and dump individuals on government-run exchanges or Medicaid. This would drive up the cost of Obamacare, and at the same time, the government would no longer be collecting penalty money from non-complying firms.

The study predicts that most employers would still maintain coverage even if the mandate is eliminated, and that 500,000, or 0.3 percent, would lose coverage. It also estimates that ditching the mandate would require raising $46 billion from 2014 through 2023 to offset the cost of the elimination of penalty revenue and the increased spending on government health benefits.

What's interesting about the study is that it isn't coming from a group traditionally opposed to the law. In fact, quite the opposite. The study argues that ditching the mandate will strengthen the law and help it become more entrenched.

"Eliminating the employer responsibility requirements should substantially diminish employer opposition to the ACA," the study reads. "In fact, without that burden, employers may play more of a role promoting the expansion of coverage under the law."

In February, the Obama administration announced another delay in the implementation of the mandate.

Under the revised rules, in 2015, the penalties will only hit employers who have 100 or more employees. And for these larger employers who could be subject to the penalties, they'll only be penalized if they fail to offer coverage to 70 percent of their full-time employees, rather than 95 percent as previously required.

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