There are numerous reports coming out in the media about the progress of ongoing health care negotiations, and the fate of different policy provisions. One of the big questions is the extent to which employers will be required (or encouraged with the threat of government sanction) to provide health benefits to employees.
Here‘s the Associated Press’s take on where this matter stands:
Businesses would not be required to provide health insurance under legislation being readied for Senate debate, but large firms would owe significant penalties if any worker needed government subsidies to buy coverage on their own, according to Democratic officials familiar with talks on the bill.
For firms with more than 50 employees, the fee could be as high as $750 multiplied by the total size of the work force if only a few workers needed federal aid, these officials said. That is a more stringent penalty than in a bill that recently cleared the Senate Finance Committee, which said companies should face penalties on a per-employee basis.
So what kind of incentives will this create for businesses? Basically, they will have a real financial incentive to avoid hiring anyone who might not have health insurance on their own: namely those who are poor and single.
I wrote about this topic on National Review Online’s blog Critical Condition here. This is just one of the many problems that will be created by government’s massive reworking of the health care sector. People may focus only on the benefits the government promises to provide, but they often overlook who will end up worse off as a result. In this case, people will applaud that employers will be forced to foot the bills for their workers, but they may not realize that those companies may hire fewer workers–particularly poorer workers–which is really bad news for many of the most vulnerable Americans.