The Wall Street Journal today has an article today entitled: “McCain Presses Obama on Health-Plan Penalties.” Excerpt:
As the presidential candidates push their competing health-care plans, Sen. John McCain regularly presses Sen. Barack Obama to tell voters how big a fine he would impose on companies that don’t offer their workers health insurance. . .He made the point again at Wednesday’s presidential debate. “Senator Obama, I’d …still like to know what that fine’s going to be.”
Obama officials say the campaign has no plans to answer that question before Election Day on Nov. 4. Neera Tanden, a top Obama policy adviser, said the fine is intended to discourage employers from dropping coverage, not to raise significant revenue.
Here is what Senator Obama’s website says about his proposals for health care as it pertains to employer contributions:
(4) EMPLOYER CONTRIBUTION. 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.
You can read about a similar requirement imposed now at the state level in Massachusetts in this article from McDermott Will & Emery: “The Massachusetts Health Care Reform Act–What Employers Need to Know.”
My guess is that initially large employers might be required to pay a fee under Obama’s plan similar to the ones currently adopted under laws such as the Massachusetts law, but that once the door is opened on this, the fees will be raised more and more because the costs of the program will require it. (Read about how this is already happening in Massachusetts here.)
An issue of real concern will be whether employers, once they are required to provide a minimum benefit, will then discard their more generous programs and that employees will end up footing more of the costs themselves. It is also ironic that the Obama proposal would target large employers when they are the ones typically providing more benefits to employees in the first place.
Another question is: what is a “large employer” under this plan? I do not find an answer anywhere, but if you use the Massachusetts model, employers with 11 or more employees were subjected to the “fair share” mandates. Certainly “Joe, the Plumber” would probably not be subjected to the mandate as discussed in the debates last night unless he became a “large employer” under the Democratic plan.