The left and the right agree: Scrap ObamaCare’s employer mandate

The drumbeat for eliminating the Affordable Care Act’s employer mandate is getting louder. And it is under attack from both sides of the political aisle, according to The Washington Post. The real question is, especially given new opposition from the law’s own supporters: Can it survive? A briefing paper released by the Urban Institute and...

The drumbeat for eliminating the Affordable Care Act’s employer mandate is getting louder. And it is under attack from both sides of the political aisle, according to The Washington Post. The real question is, especially given new opposition from the law’s own supporters: Can it survive?

A briefing paper released by the Urban Institute and Robert Wood Johnson Foundation both liberal-leaning organizations that support the Affordable Care Act, or ACA, makes the case for scrapping the employer mandate. According to the report’s authors: “Our analyses as well as that of others find that eliminating the employer mandate will not reduce insurance coverage significantly, contrary to its supporters’ expectations. Eliminating it will remove labor market distortions that have troubled employer groups and which would harm some workers.”

The employer mandate provision of the ACA was supposed to go into effect Jan. 1, 2014, but was delayed this past summer for one year by the Obama administration. The mandate was recently delayed again for another year for those employers with 50 to 99 full-time or full-time equivalent employees. Under ObamaCare, 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 coverage mandate would dramatically increase the operating costs for these firms. That is why many employers who are just above or below the 50-employee cut off have the biggest incentive to reduce the number of employees or their employees’ hours. By reducing the number of full-time equivalents below 50 and reducing hours below 30 hours per week, these companies can shield themselves from the mandate’s costs altogether. As a result of the mandate, both employer and employee come out losers. Employers hold back on expansion while hourly workers are shut out of more opportunities for work.

The facts about the destructive nature of the employer mandate are not in dispute. In fact, they have been widely acknowledged by both supporters and opponents of the president’s signature legislation. Previous research by the Illinois Policy Institute has also shown that it is the workers in the nation’s lowest-paid sectors who may already be facing the biggest harms through involuntary cuts to their work hours as a result of ObamaCare.

Scrapping the employer mandate would not only be welcome news for Illinoisans, it would benefit the nation’s hourly, lowest-wage workers who are facing jobs and hours cuts. Given these harmful effects – widely acknowledged on both sides of the aisle – there is little reason to think that this provision shouldn’t be scrapped altogether.