The Corner

What’s Obamacare’s Employer Mandate Giving Workers in Return for Fewer Hours? According to One CEO, Not Much

The Wall Street Journal has an interesting opinion piece today by Andy Puzder, the CEO of a big fast-food conglomerate, that runs the numbers about how much Obamacare’s employer mandate has increased employer insurance coverage. His conclusion: “Not much.”

Of the 6,900 eligible employees, 1,447 already had ObamaCare-compliant insurance through our pre-existing company plans. That left 5,453 employees eligible to sign up. A grand total of 420 actually enrolled. That’s a mere 2% of total employees, or 6% of eligible employees.

ObamaCare will penalize the 5,033 eligible employees who elected not to enroll, unless they have compliant health insurance from another source. For 2015, the penalty is the higher of $325 or 2% of annual household income above about $10,000. The 5,033 employees who declined insurance make $24,663 a year on average. As a result, the employees without insurance generally will pay the $325 penalty, as it takes $26,250 before the 2% penalty is higher.

The employee portion of the annual premium for our least-expensive “bronze plan” is $1,104. If you don’t believe you need health insurance, $325 beats $1,104. But employees compelled to pay the penalty still won’t have compliant insurance. For those who want insurance, then, we offer all our employees—full and part time—access to inexpensive group health-care coverage that is not ObamaCare compliant.

 The mandate did introduce other distortions, he notes:

So what does ObamaCare’s 30-hour rule accomplish? Some would argue that it does a lot, pointing to the previously uninsured who now have employer-sponsored health insurance. In our company, that would be 2% of total employees and 6% of eligible employees.

For results like that, ObamaCare has caused millions of full-time jobs to become part-time, imposed a tax on lower-income workers who cannot afford it, forced millions of people out of insurance they liked, restricted access to doctors for millions of others, and created an enormous bureaucracy that discourages our doctors and nurses while suppressing health-care system innovation.

There’s been some debate about eliminating the mandate Puzder is discussing in this op-ed; for now, the House of Representatives has voted to move its threshold to 40 hours, but the Senate hasn’t taken up the bill.

Veronique de Rugy is a senior research fellow at the Mercatus Center at George Mason University.

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