The employer mandate is the requirement that businesses with 50 employees or more offer health coverage to full-time employees or pay a penalty of $2,000 to $3,000 per worker.
Despite the aggressive sound of the word “mandate,” the provision is not the intrusion its critics make it out to be. Of the 230,000 companies with 50 or more workers, the vast majority already provide insurance to some 88 million workers. Only about 11,500 companies with roughly 1.4 million workers will have to grapple with the mandate when it takes effect in 2015.
But that is apparently too much to ask for the four senators — Susan Collins, Republican of Maine; Lisa Murkowski, Republican of Alaska; Joe Donnelly, Democrat of Indiana; and Joe Manchin, Democrat of West Virginia.
They have taken aim at the definition of “full time” in the health care law, which is set at 30 hours per week. Their legislation, the Forty Hours is Full Time Act, would change the threshold to 40 hours. Their concern, they say, is that employers may be increasingly motivated to avoid the mandate by cutting workers’ hours. In a letter to the Budget committee, they wrote that defining “full time” as 40 hours a week “will help protect millions of employees from having their hours curtailed” and their earnings reduced.
But if their concern really is preserving hours and wages, their legislation makes no sense.
The Center on Budget and Policy Priorities analyzed the issue in detail in this report. The gist is that with a 30-hour threshold, the employees at risk of having their hours cut are those who work 30 to 34 hours a week — less than 8 percent of today’s workers.
But with a 40-hour threshold, the workers at risk are those who work 40 or more hours per week, or about 45 percent of the workforce.
In other words, raising the threshold would actually place more workers at risk of having their hours reduced. The result would be substantially less employer-sponsored coverage, which in turn, could cause a large increase in federal spending on subsidized coverage for people who otherwise would be covered at work — just what the foes of health care have long claimed it would do.
The legislation is off base in