The Employer Mandate


Several years ago, I wrote an article supporting an employer mandate as the least objectionable way to expand health care coverage in America.  Small business owners roundly disparaged me.  They could not afford it they claimed. 

Did I say 8%?
Did I say 8%?

Indeed, it would be a financial burden, but given everyone would have the same obligation I argued, costs go up for everyone and thus no one player is disadvantaged.  In lieu of that, others argued that it would be better to have a government plan.  However, said I, to do that you would have to pay for it and by my calculation that would be about 8% of payroll and once that was in place the employer would lose all control over future costs.  Now, given that health care costs typically rise much faster than wages, it is not hard to see that with pay going up say 3 to 3.5% a year and health care going up at least twice that rate, the 8% would quickly be inadequate. 

To my amazement and in confirmation of my considerable prognostication skills (hey, I sound like Rush), the current version of the House Tri Committee health care reform legislation requires employers to offer health benefits or pay an 8% payroll tax

Pay with some control or pay with no control over future costs, take your choice.

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