House bill mandating infertility insurance be offered
All told, 5.2 million low-wage workers will be at risk of losing their jobs or having their hours of work reduced, and they will likely have fewer job opportunities in the future. APPENDIX: Methodology The findings in this report on the number of workers who are "at risk" of negative employment effects from the play-or-pay employer mandate, and the static job loss estimates that such a mandate would cause, were generated using the Census Bureau's "March 2008 Annual Social and Economic Supplement" (ASEC).
Another 10.2 million workers are at risk of slower wage growth and cuts in other benefits, and some of the cost of any play-or-pay mandate will be passed on to Americans in higher prices for the goods and services they buy--an indirect tax on savers and those on fixed incomes. Mark Wilson is a consultant for The Heritage Foundation and a former Deputy Assistant Secretary for Employment Standards Administration at the U. To estimate the number of workers who are at risk and the estimated jobs that would be lost due to the employer mandate in H. 3200, the following steps were taken: Health insurance variables for "total private," "employment-based," "direct purchase," "total public," "Medicaid," "Medicare," "Military Health Care," and "not covered" were constructed using ASEC variables to match the Census Bureau estimates published in "Income, Poverty, and Health Insurance Coverage in the United States: 2007," Table C-1, August 2008.
Hiring decisions are based on the total compensation of employment, including wages and benefits, such as paid vacation and holidays, paid sick leave, retirement benefits, and health insurance.
If a worker's compensation is sufficiently high to absorb the entire cost of the new mandate, the mandate will likely change the composition of compensation (lower wages, more benefits) but not the total value of compensation.
The sum of the probabilities of job loss for at-risk workers, using the appropriate ASEC weight, was calculated to estimate the national employment loss estimate.
Labor Committee substitute at Affordable Health Choices Actof2009/MILLCA_158(August 24, 2009), and (3) the "Blue-Dog compromise" at /static/reportimages/43FC0A9F05B07940A3059669CDF55E08(August 24, 2009).
(See Table 3.) Their median weekly earnings are between 7 and 0.
They are disproportionately Hispanic women in families, ages 16 to 25, who are not citizens. How a Mandate Will Change Employment-Based Health Insurance The Congressional Budget Office estimates that under H. 3200, some firms would decide to stop offering health insurance, and 3 million workers would lose their employment-based coverage, because, from the employer's perspective, it is more costly to "pay" than to "play" under the mandate, particularly for low-wage workers. This finding is consistent with the fact that private-sector employers currently pay 10 to 12 percent of wages to provide health insurance, significantly more than the 8 percent firms would have to pay if they choose to no longer offer health insurance. The CBO also estimates that under H. 3200, 3 million low-wage workers who would be covered by employment-based insurance would instead choose to purchase insurance through the new health insurance exchanges with a subsidy. Another 3 million part-time workers would likely decline to enroll in their employer's health insurance and instead purchase insurance through the new exchanges with a subsidy. Finally, the CBO estimates that under H. 3200, 12 million workers who are currently uninsured would enroll in their employer's health insurance coverage. This increase is driven by two factors: (1) the individual mandate will increase the take-up rates for eligible workers who currently decline coverage for a variety of reasons; and (2) some employers will find it less costly to play than to pay, especially for higher-income workers, and begin to offer coverage. The Cost to Businesses There are a number of costs to employers in H. 3200 and the HELP Committee bill that are related to the play-or-pay mandate, including: (1) the cost of not offering health insurance (the pay part of play-or-pay); (2) the cost of providing health insuranceto workers who do not currently have coverage (the play part of play-or-pay); and (3) the increased cost of providing health insurance that meets the essential benefits package mandated by the legislation.
Most of the workers in covered businesses who do not have employment-based health insurance are employed in industries defined by the Census Bureau as: restaurants (12 percent), department stores (3 percent), grocery stores (3 percent), colleges and universities (3 percent), other amusement (a subset of amusement), gambling, and recreation industries (2 percent), nursing care (1.7 percent), and employment services (1.5 percent).However, a problem arises when a worker's compensation consists primarily of wages and is not high enough to absorb the cost of the mandate without bumping into the minimum wage.In this case, the play-or-pay mandate will have the same effect on employment as an increase in the minimum wage and will likely reduce the employment of, and job opportunities for, low-skilled workers. Since the beginning of 2008, when San Francisco mandated employers to offer health insurance to workers or pay a fee to the city to fund health care, restaurants have explicitly passed on the cost of the mandate to consumers in the form of a health surcharge that shows up on the restaurant bill as a flat fee or as a percentage (like a sales tax).Under the Senate HELP Committee bill, there will be substantially different changes in coverage because employers that do not offer the qualified health insurance to their employees would have to pay only 0 per year for each full-time worker, and 5 per year for each part-time worker, substantially less than the 8 percent tax in H. Therefore, the total cost of the play-or-pay mandate for employers will be at least .4 billion to .7 billion per year.The Mandate: 5.2 Million Low-Wage Employees at Risk Several factors influence the degree to which requiring employers to offer health insurance will affect prices, wages, employment, and profits.
Congressional Budget Office, "Additional Information Regarding the Effects of Specifications in the America's Affordable Health Choices Act Pertaining to Health Insurance Coverage," July 26, 2009, at On Tri Comm (August 24, 2009).