Fascinating Question

shutterstock_141533524-750x420Can an employer pay chronically ill workers to leave the company health plan and get insurance somewhere else? That’s a question some business owners are asking, now that no one can be turned away from individual health plans under ObamaCare. The potential loophole in the Affordable Care Act could threaten the viability of ObamaCare marketplaces if they get the most expensive-to-insure workers while companies keep healthier employees on their own plans. Some mid-sized companies that self-insure — that is, they pay the cost of employees’ medical claims directly — are at least talking about the idea. (BusinessWeek)

Comments (24)

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  1. Billy says:

    What a mess.

  2. Wilbur says:

    This stupid law has caused more problems than it has solved.

    • Mark says:

      Because those idiots had no idea what they were voting for. Party leadership fell in line behind Obama so it didn’t matter what was in that mountain of paper.

    • Andrew says:

      But the big guy said it was the right solution. He wouldn’t steer us wrong.

  3. Wiliam says:

    “The potential loophole”

    One of hundreds.

  4. Stewart T. says:

    Businesses are just looking to treat their employees like cattle again.

    • Andrew says:

      We will only appear to them as cattle or herds of sheep if we do not actively fight for change.

    • Jimbino says:

      Anyone who works for benefits instead of a pure wage deserves to be treated like cattle. Participating in insurance of any kind, like religion, is herd behavior.

      A company that wants real workers would do well to advertise: NO BENEFITS. Even better: no pay, only stock options.

      That way it will attract bright, well-educated, single, childfree, healthy young males–like Silicon Valley and Wall Street. Who the hell wants to hire an old, sick, hypochondriac, female or married breeder looking for benefits?

      • John R. Graham says:

        I’m afraid you have contradicted yourself: “pure wage” are different than stock options.

        Options are preferred from a tax perspective. So, if people only cared about tax efficiency all labor income would come as stock options. However, such reimbursement concentrates risk to a degree that is unacceptable to almost everyone.

        With respect to benefits, the problem (of course) is the tax wedge that the government has imposed on the decision-making. I suppose that there could come a point when employer-sponsored benefits are so inefficient that people would prefer cash despite paying taxes on the income, but the public dialogue around Obamacare suggests that we are nowhere near that point yet.

        • Jimbino says:

          I agree with you on the despicable “wedge” that amounts to nothing more than a gummint grant supporting religion and superstition in the form of insurance.

          But you are wrong on the “contradiction,” though I agree that stock options in lieu of wages and benefits attract the best workers: non-risk-averse types like the Wright Bros, Edison, Jobs, Dell and Wozniak.

          If you want brainless, religious pencil-pushers, you offer a wage and benefits like FMLA, unemployment compensation, workers’ compensation, health insurance, vacation and the like.

          I never heard of an inventor of cars, light bulbs, airplanes, nuclear weapons or computers who had an interest in any of those things. In fact, entrepeneurs will sell their VW vans (Jobs), hock their homes, rent out their wives and kids and work 100-hour weeks in order to pursue their dreams. Insurance HaHa!

  5. Kilian says:

    Thanks for the post John!

  6. Erik says:

    I thought that it was written into the law that if an employer subsidizes premiums in the exchange those subsidies are counted as income by the IRS. So the employee would be responsible for the taxes on those subsidies.

    I see a liability for the employer under this circumstance.

    • Jimbino says:

      The employer needs to turn the employee into a consultant or independent contractor. Not easy, but I worked at high pay with no benefits for years under those conditions. An independent contractor can escape all the nonsense but income tax and FICA.

      No vacation, no sick leave, no FMLA, no unemployment insurance, no workers’ compensation insurance, no Obamacare. Only lots of MONEY.

      • Erik says:

        If you ever had a catastrophic illness you would change your tune. Greed is not the answer to life’s problems.


        Carry on with your bad self…

  7. Bob Hertz says:

    Or, in the case of ‘independent truckers’ and many real estate salespeople and nearly all artists and musicians, the contractor status means fewer benefits AND less money.

    And computer skills are not necessarily the answer. My son recently showed me a website where free-lancers bid for jobs designing websites and orgainizing files.

    The typical bid was about $150 for what seemed to be one or two solid days of work. The prices were being driven down by extremely low offers from foreign programmers.

    As John Graham noted above, there is more pressure for security and benefits than there is for liberation.

    A large portion of elderly people have worked in pension-less jobs their entire life, and now depend entirely on social security. I see nothing wrong with policies to reduce this dependence in the future……..but Ayn Rand-like declarations are not the same as a policy.

    • Jimbino says:

      As Adam Smith and Milton Friedman long ago pointed out, you don’t need or want a policy to make a pencil or the Internet.

      The free market alone is sufficient to marshal the invention and industry to build anything. Of course, there is always the socialist who will say, “You didn’t build that.” Right, a spark of genius and the free market are what built it. Ayn Rand explained how that works.

      • Erik says:

        you got it bad don’t you. Ann Rand was a welfare recipient. That should make her Uber-Independent right?

        Talk is cheap…