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Conservatives Campaign to Eliminate the Employer Mandate

Posted on September 19, 2012 by admin

Bearing a striking resemblance to the individual mandate, the employer mandate requires that every business with more than 50 full-time workers must provide health insurance for full-time employees. If it does not, the business must pay an Employer Shared Responsibility Payment on their tax return. Basically, just like the individual mandate: get insurance or pay the penalty. The employer mandate just exists on a larger scale.

Furthermore, just like the individual mandate, the employer iteration has been met with its fair share of criticism.

As with all things Obamacare, the employer mandate is based on ideals. Ensuring that all full-time workers receive health insurance is a noble goal. It’s something worth fighting for, which is why there is so much effort being put into getting people coverage, regardless of their walk of life. But the employer mandate raises some concerns. Waving the “threat” of extra compensation at employers risks the possibility of them taking every possible measure to avoid accruing additional expenses. In response, they can limit their workers to 30-hour weeks. They can cap their number of employees at 49. Some may engage in any and every tactic to save money.

Former Senator Scott Brown is the latest to call attention to this problem with his most campaign ad, “President Obama and Senator Shaheen forced on us a health care system that doesn’t work … and next year, it gets worse. Businesses will be mandated to offer coverage, which means higher costs and fewer jobs.”

The former senator is not completely unjustified in his claims, as a recent Sageworks study indicates that there is a sizable percentage of companies – approximately 54 percent – that will not be expanding in the near future. Some companies have even stated that they anticipate significant cuts to their payrolls (13 percent). However, there are certain aspects of the Sageworks poll that refute his analysis of the employer mandate. Both of these percentages have been reduced since last year, and a third and very important number is on the rise.

In 2013, over 65 percent of business owners polled said that they would not expand. More than 14 percent of employers said they would have to make severe cuts. Thus, this year’s study reveals a substantial transformation: the former being reduced by 11 percent and the latter by 1 percent. But the key prospect is the percentage of those employers who said they wanted to expand their companies in the near future – they’ve gone from being 13 percent of the equation to almost 19 percent.

The tides of business opinion are turning. And their level of confidence is rising.

This is invaluable for the success of Obamacare. While there is still some doubt as to how the employers will react come the launch of the employer mandate, which has been delayed by the Obama administration until 2015/2016 to give middle-sized businesses more time to prepare, studies such as this one provide the reassurance necessary to believe that noble goals can be achieved without sacrificing practicality – in this case, job security.