Wednesday, November 26th, 2014

The Obameter

Require large employers to contribute to a national health plan

"Large employers that do not offer meaningful coverage or make a meaningful contribution to the cost of quality health coverage for their employees will be required to contribute a percentage of payroll toward the costs of the national plan. Small businesses will be exempt from this requirement."

Updates

Health care law targets large employers with penalties if they don't offer insurance

During the campaign, President Barack Obama said that large employers would have to offer their workers health insurance or contribute toward the costs of a national plan. This type of requirement is usually called an employer mandate.

But the final version of the health care law requires a contribution from employers, but it's not a straightforward mandate. Instead, the law states that large employers have to pay fines if any of their workers qualify for public subsidies.

The fine has many byzantine, technical details. Generally speaking though, the fine applies to employers with more than 50 employees if at least one full-time employee receives a public subsidy to buy insurance. The fee would be $2,000 for all employees, excluding the first 30 employees. The legislation lays out even more specifics for who is considered a full-time employee, reporting requirements for employers, and other special cases. The fines take effect in 2014.

The bottom line, though, is that large employers that do not offer health insurance will almost certainly have to pay a fine, because it's very likely that at least one of their workers would qualify for a subsidy, according to the Center on Budget and Policy Priorities, a left-leaning think tank that analyzed the issue.

The health care law has a complicated mechanism for ensuring that large employers contribute. But it does appear to fulfill the details of Obama's pledge. So we rate this Promise Kept.

Sources:

Thomas, HR 3590, (health care legislation), became public law March 23, 2010

Kaiser Family Foundation, Summary of New Health Care Reform Law, March 23, 2010

Center on Budget and Policy Priorities, Senate Health Bill Improves Employer Responsibility Provision, Nov. 19, 2009

Health reform bill requires employers to contribute

After months of talking about health care reform, the U.S. House of Representatives introduced major legislation to overhaul the nation's health care system. House Democrats unveiled the 1,000-plus-page bill, called America's Affordable Health Choices Act of 2009, on July 14, and it includes most of President Barack Obama's key proposals on health reform.

One of Obama's promises was to require large employers to contribute, and the House bill includes that. If large employers don't offer health care, they'll have to pay a tax that's about 8 percent of payroll. Small businesses with a payroll of less than $250,000 are exempt; the tax phases in on payrolls between $250,000 and $400,000.

To be sure, there's a long way to go — maybe months — before the bill becomes law. It has to pass the House and get through the Senate, where many changes could be made.

Nevertheless, the bill marks significant, measurable progress on Obama's promise, and we rate it In the Works.

Sources:

Thomas, HR 3200 , introduced July 14, 2009

U.S. House of Representatives Energy and Commerce Committee, House Democrats Introduce Bill to Provide Quality, Affordable Health Care for All Americans , July 14, 2009

U.S. House of Representatives Committee on Ways and Means, Markup of H.R. 3200, America"s Affordable Health Choices Act , July 16, 2009