Jobs, Coverage Lost Under ObamaCare Say Two New Reports
Two new reports show tough times ahead for American workers as ObamaCare comes closer and closer to fruition.
Business consulting firm Deloitte surveyed employers with 50+ employees who are currently offering their employees health care.
They found one in ten are planning to stop offering health care to their employees as a result of ObamaCare. In addition, the survey found one in three would consider dropping benefits if ObamaCare forces them to pay for more extensive coverage then they do now, if the tax on so-called "Cadillac" health plans goes into effect or if the tax for not offering health care would be far less than the premiums they now pay.
The Deloitte survey found a huge divide between large and small businesses. Only 2% of businesses with 1,000 or more employees are considering dropping health care coverage, while 13% of businesses with between 50 and 100 employees said they were planning to drop coverage.
Even for those who will retain health care coverage, the Deloitte survey contains some bad news. About three-fourths of employers contacted said they either have or would be increasing their employees' contribution to health care coverage.
John Goodman (pictured), President and CEO of the National Center for Policy Analysis, delivers more bad news for American workers with his testimony to Congress entitled, The Impact of the Patient Protection and Affordable Care Act on Job Creators and the Economy.
Goodman starts out by breaking down the cost of the health care mandate for every worker. Citing Congressional Budget Office figures, the average annual cost of a minimum benefit package will be between $4,500 and $5,000 for individuals and $12,000 to $12,500 for a family plan.
This translates to roughly $2.28 an hour for full-time individual workers and $5.89 an hour for family coverage.
By next year, the minimum cost of labor for a worker with family insurance coverage will be will be a $7.25 cash minimum wage and a $5.89 health minimum wage (family), for a total of $13.14 an hour or about $27,331 a year.
Goodman sums up the problem with the ObamaCare mandate:
Goodman cites an example of a 55 year old head of a family of four in a high cost region whose health care will cost $23,700 a year. ObamaCare caps premiums at 9.5% of income for families that earn 350-400% above the poverty line, so the family would actually pay $8,901 -- resulting in a subsidy of $14,700.
However, should the family earn just $1 more than $93,699 threshold for the subsidy cap, the family would then be on the hook for the whole $23,700 a year. In effect, that $1 of income would be taxed at a marginal rate of 1.47 MILLION percent!
Employers will game the new system as well. Employers with 51 or more workers must pay a $2,000 penalty for not covering workers with an approved health care insurance package. So, if a business grows from 50 to 51 employees without adding coverage, it would be a $42,000 annual tax.
Employers could avoid this tax by simply turning 20 of their 51 workers into part-time employees. This would reduce the fine from $42,000 to $2,000, while 20 workers who want to work full-time would be reduced to part-time employment.
Experience has shown, when workers and employers make business decisions based on government mandates rather than what's best for consumers, everyone suffers.
The previous What's Happening with Seniors Benefits: How the IRS is 'Fixing' a Big Mistake in ObamaCare
Business consulting firm Deloitte surveyed employers with 50+ employees who are currently offering their employees health care.
They found one in ten are planning to stop offering health care to their employees as a result of ObamaCare. In addition, the survey found one in three would consider dropping benefits if ObamaCare forces them to pay for more extensive coverage then they do now, if the tax on so-called "Cadillac" health plans goes into effect or if the tax for not offering health care would be far less than the premiums they now pay.
The Deloitte survey found a huge divide between large and small businesses. Only 2% of businesses with 1,000 or more employees are considering dropping health care coverage, while 13% of businesses with between 50 and 100 employees said they were planning to drop coverage.
Even for those who will retain health care coverage, the Deloitte survey contains some bad news. About three-fourths of employers contacted said they either have or would be increasing their employees' contribution to health care coverage.
John Goodman (pictured), President and CEO of the National Center for Policy Analysis, delivers more bad news for American workers with his testimony to Congress entitled, The Impact of the Patient Protection and Affordable Care Act on Job Creators and the Economy.Goodman starts out by breaking down the cost of the health care mandate for every worker. Citing Congressional Budget Office figures, the average annual cost of a minimum benefit package will be between $4,500 and $5,000 for individuals and $12,000 to $12,500 for a family plan.
This translates to roughly $2.28 an hour for full-time individual workers and $5.89 an hour for family coverage.
By next year, the minimum cost of labor for a worker with family insurance coverage will be will be a $7.25 cash minimum wage and a $5.89 health minimum wage (family), for a total of $13.14 an hour or about $27,331 a year.
Goodman sums up the problem with the ObamaCare mandate:
For above-average-wage employees, expect wage stagnation over the foreseeable future, as employers use potential wage increases to pay for expanded (and mandated) health benefits instead. At the low end of the wage scale, however, the effects of this new law are going to be devastating.Goodman also finds several other ways the complicated ObamaCare regime will result in potential disasters for workers and employers.
Ten-dollar-an-hour workers and their employers cannot afford $6-an-hour health insurance. If they bought it, only $4 would be left for cash wages and that would violate the (cash) minimum wage law. This is not a small problem. One-third of uninsured workers earn less than $3 above the minimum wage.
Goodman cites an example of a 55 year old head of a family of four in a high cost region whose health care will cost $23,700 a year. ObamaCare caps premiums at 9.5% of income for families that earn 350-400% above the poverty line, so the family would actually pay $8,901 -- resulting in a subsidy of $14,700.
However, should the family earn just $1 more than $93,699 threshold for the subsidy cap, the family would then be on the hook for the whole $23,700 a year. In effect, that $1 of income would be taxed at a marginal rate of 1.47 MILLION percent!
Employers will game the new system as well. Employers with 51 or more workers must pay a $2,000 penalty for not covering workers with an approved health care insurance package. So, if a business grows from 50 to 51 employees without adding coverage, it would be a $42,000 annual tax.
Employers could avoid this tax by simply turning 20 of their 51 workers into part-time employees. This would reduce the fine from $42,000 to $2,000, while 20 workers who want to work full-time would be reduced to part-time employment.
Experience has shown, when workers and employers make business decisions based on government mandates rather than what's best for consumers, everyone suffers.
The previous What's Happening with Seniors Benefits: How the IRS is 'Fixing' a Big Mistake in ObamaCare
