July 22, 2013

Another Consequence Of Obamacare

Guest column submitted by U.S. Senator Mike Crapo

Since Obamacare was rammed through Congress, we have seen the problems and costs continue to grow.  Reports of workers losing work hours and pay due to Obamacare health care coverage mandates are among the problems.  Given the considerable problems with the law, the Obama administration's recent delay of the health care law mandate that forces employers to provide insurance or face a penalty is welcome.  However, it only magnifies the concerns businesses, specifically small businesses, have raised about their ability to comply with this unworkable, complicated law. 

The Patient Protection and Affordable Care Act, or Obamacare, subjects employers with at least 50 full-time equivalent (FTE) employees to penalties for not providing health insurance or for providing health insurance that does not meet certain criteria.  Working an average of at least 30 hours per week is considered full-time employment.  Part-time employee hours are also counted toward this threshold. 

The nonpartisan Congressional Research Service provides an example of how a small business close to reaching this threshold would be considered a large employer for the purposes of the mandate:  "Consider a firm with 35 full-time employees (30 or more hours).  Assume the firm also has 20 part-time employees who all work 24 hours per week (96 hours per month).  These part-time employees' hours would be treated as equivalent to 16 full-time employees for the month…Thus, in this example, the firm would be considered a 'large employer,' based on a total FTE count of 51-that is, 35 full-time employees plus 16 FTEs based on the number of part-time hours worked."

While part-time employees are counted in calculating whether a business is considered a large employer, the amount of an employer's penalty is based on its number of full-time employees.  The Congressional Budget Office(CBO) projected that these penalties are expected to cost employers $140 billion over the next 10 years. 

Recent reports indicate that some employers are decreasing their number of full-time employees or adjusting their hours to reduce or eliminate their potential health care mandate penalty.  A U.S. Chamber of Commerce study indicates that health care continues to be a impediment to growth, and the health care law makes it harder for the majority of small businesses questioned during the study to hire:  "In short, small business owners will change from investing in their employees and their company to a strategy of avoiding growth that will require them to comply with the health care law."

This has the opposite effect of what health care reform was supposed to achieve and is damaging to American families and our economy.  The goal of health care reform was to increase access to quality health care, not reduce wages that could decrease the ability of families to afford health care.  The CBOestimates that approximately 31 million Americans will be uninsured. 

Americans overwhelmingly want solutions that deliver what they need-access to high-quality, affordable health care, which is exactly why this law should be repealed and replaced.  It fails on promises to lower health costs and premiums for working families.  It fails on promises for American people to keep their health care plan if they liked it, and millions of people have learned they cannot.  It increases the burden for small businesses to hire workers.  In the three years since President Obama signed this damaged law, its problems have not gone away and additional problems have surfaced.  Individuals and families should be given a permanent exemption from its mandates.

# # #

Word Count:  573