Congressman Chris Van Hollen (D-MD) said on Fox News Sunday (September 15th) that the delay in the employer mandate is no big deal, since only five percent of employers would be affected by it. I’ve heard this argument from a large number of ObamaCare supporters now, so it must be part of the talking points circulating among Democrats. It raises two possibilities –
- Mr. Van Hollen is perfectly willing to lie to score political points, which is scary, or
- He thinks it is a true statement, which is scarier still.
Now, like most misstatements there may be a grain of truth here. The best source of information about employer health benefits is the annual Kaiser Family Foundation/Health Research and Educational Trust survey.
The 2013 survey finds that –
99% of large firms (200 or more workers) offer health benefits to at least some of their workers. In contrast, only 57% of small firms (3199 workers) offer health benefits in 2013.
So, given the ObamaCare exemption of firms with fewer than fifty employees, and the vast majority of large firms offering (some) coverage to (some) employees, it is plausible that only five percent of firms that don’t currently offer any coverage at all, will be required to provide it in the future.
But that barely scratches the surface.
While overall 57% of all companies offer health insurance, the percentage varies dramatically by industry. The industries that are lower than the average include Wholesale (54%), Finance (49%), Retail (29%), and perhaps surprisingly, Health Care (51%). So the impact of the employer mandate will vary dramatically by industry. 100% of state and local government employers offer coverage.
More importantly, even in the 99% of large companies that offer coverage, only 61% of workers are actually covered. Why? The companies likely don’t offer coverage to part-time or temporary workers, they probably require a certain amount of time on the job (like three to six months) before the employee becomes eligible, and large numbers of workers don’t sign up for coverage even when they are eligible.
ObamaCare will change most of this. Not so much for part-timers, but certainly for temporary workers and new hires (they must all be covered after 30 days), and certainly for many of those who don’t currently take-up the coverage. Employers will be required to actually provide, not just “offer” health benefits and that will raise their costs of employment substantially.
That means, Congressman Van Hollen’s spin notwithstanding, virtually all employers with over 50 employees will be profoundly affected by the employer mandate — even the 100% of state and local governments that currently “offer” health benefits to some of their workers.